Ethics Question: Angela Torres, CPA, is a partner at Whitfie…
Ethics Question: Angela Torres, CPA, is a partner at Whitfield & Associates, a public accounting firm. Whitfield & Associates performs the annual financial statement audit of Cedar Grove Development, LLC, a real estate development company organized as a limited liability company. Angela personally owns a 3% membership (equity) interest in Cedar Grove Development, LLC, which she acquired several years before her firm was engaged to audit the company. Under Cedar Grove’s operating agreement, all members — including Angela — have the right to participate in major management decisions and to vote on matters such as approving new development projects and admitting new members, similar to the rights typically held by a general partner. Under the AICPA Code of Professional Conduct, is Angela’s 3% membership interest in Cedar Grove Development, LLC likely to impair Whitfield & Associates’ independence with respect to the audit?
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