Question

Which of the following activities would not impair the independence of a CPA firm regarding an audit client?

a. Post the client-approved entries to a client's trial balance.
b. Authorize the client's customer credit applications.
c. Use CPA's information-processing facilities to prepare the client's payroll and generate checks for the client treasurer's signature.
d. Sign the client's quarterly federal payroll tax return.
e. Advise client management about the application or financial effect of provisions in an employee benefit plan contract.

Answer 1

The activity that would not impair the independence of a CPA firm is posting client-approved entries to a client's trial balance.

Step-by-step explanation:

The activity that would not impair the independence of a CPA firm regarding an audit client is b. Post the client-approved entries to a client's trial balance.

The independence of a CPA firm is important to ensure that the audit process is unbiased and objective. Performing activities such as authorizing credit applications, using information-processing facilities to prepare payroll, signing tax returns, and advising client management can all potentially impair independence.