Independence Compliance: Checklists and Tools for Complying With AICPA and GAO Independence Requirements

This Practice Aid consists of two independence review tools that address two diverse sets of auditor independence rules. The first review tool addresses requirements of Rule 101, Independence, and its related rulings and interpretations of the AICPA Code of Professional Conduct. The second review tool addresses the Government Accountability Office (GAO) independence rules.

Each of the review tools are divided into two sections. The first section is a series of questions designed to help auditors identify potential independence issues. The second section suggests possible follow-up actions that auditors may consider in addressing an independence issue.

This handy practice aid is a useful tool for anyone performing an audit engagement.

To be effective, you should use the Compliance Tool(s) in a timely manner. The following scenarios illustrate the meaning of timely.

Scenario 1: The engagement is a new audit, review, or other attest engagement.

You should utilize the Compliance Tool prior to accepting an attest engagement or per- forming any attest work for the client. In a number of cases, this will allow the firm to resolve issues that surface as a result of the review. Prior to issuing your report, you should review your previous results to confirm that no changes have occurred since your initial assessment and that any matters identified during the initial assessment have been appropriately addressed, resolved, and documented.

Scenario 2: The engagement is an ongoing audit, review, or other attest engagement.

You should use the Compliance Tool early in the audit planning stage, and at other times throughout the year, as needed. Prior to issuing your report, you should review the previous results to confirm that no changes have occurred since your initial assessment and that any matters identified during the initial assessment have been appropriately addressed, resolved, and documented.