Prepared by: Lesier Fernandez, 4701995 and Maritza Alonso-Perez, 1291588
Reviewed by: Bradley Cook, 3256141
Group # 1, ACG 4651, Fall 2014 Section U03
September 16, 2014 – Case 1: The Importance of Being Independent
The foundation of public accounting firms is based on the absolute importance of being
independent. Investors, banks, vendors, businesses, customers and the financial community in
general represent the public sector. The role of an independent auditor is to protect the interests
and to promote the safeties of this sector. Public accounting plays a unique and essential function
in maintaining the safety in the free market economy. In order for the market to be successful,
the public must have faith on the information they received from independent auditors.
In this case, the uncle working for the company as a controller that you and your firm
have to audit is a problem that must be addressed before the decision to provide audit services
could be made. There are five areas where independence has a big impact on the accounting
profession. Employment Relationships is one of them and having a family member working for
the company you have to audit creates a conflict on following this rule. This regulation states that
you as an auditor cannot provide any types of audit services to an entity where conflicts of
interest may arise. Since the information gathered from the client’s financial statements and their
