Which of the following is NOT one of the key requirements for auditor independence?
A. Auditors must disclose all other written communications between management and themselves.
b. Public accounting firms must report if they are providing audit services to any company whose senior officers (Chief Executive Officer, Chief Financial Officer, Controller) were employed by that accounting firm within the previous 12 months.
C. Senior auditors on an account are required to be rotated every five years and junior auditors every seven years.
D. Specific topics must be established on which the external auditor must report to the client’s audit committee.
Ask yourself this question differently: Which four of the following are key requirements for auditor independence?
List the four ... and then the one not listed will be the answer to the question you posted.
Let us know what you decide.
To determine which of the options is NOT one of the key requirements for auditor independence, let's break down each option and identify its purpose in relation to auditor independence:
A. Auditors must disclose all other written communications between management and themselves.
This requirement ensures transparency and prevents any undisclosed communications that could compromise objectivity and independence.
B. Public accounting firms must report if they are providing audit services to any company whose senior officers (Chief Executive Officer, Chief Financial Officer, Controller) were employed by that accounting firm within the previous 12 months.
This requirement aims to identify potential conflicts of interest that may arise if senior officers who were previously employed by the accounting firm are involved in the audit.
C. Senior auditors on an account are required to be rotated every five years and junior auditors every seven years.
This requirement promotes fresh perspectives and prevents any long-term relationships that could compromise independence and objectivity.
D. Specific topics must be established on which the external auditor must report to the client’s audit committee.
This requirement ensures that essential information is effectively communicated to the audit committee for their oversight function.
Based on the above analysis, option C stands out as NOT one of the key requirements for auditor independence. The rotation of senior auditors every five years and junior auditors every seven years is indeed a requirement, but it is not a requirement specifically related to auditor independence, as it primarily focuses on promoting professional skepticism and avoiding familiarity threats.
Therefore, option C is the answer to the question.