Independence is essential in performing an audit. It is one of the primary things that distinguishes an auditor from an accountant. The American Institute of Certified Public Accountants (AICPA), Government Accountability Office (GAO), and International Federation of Accountants (IFAC) all have independence requirements and guidelines.

Although many CPAs may be familiar with the AICPA's guidelines, and those that perform Yellow Book audits are aware of the GAO's, fewer are knowledgeable of the IFAC's guidelines. The IFAC's boards not only set the international auditing and assurance standards, they also provide an international code of professional conduct. This program reviews the similarities and differences between the ethics and independence standards from these three organizations.

Note: Reporting of CPE credit to a CPA's state board is the responsibility of the CPA. Subscribers to CPE Network Accounting & Auditing Report may not receive duplicate credit for this material, which previously aired in the August 2011 edition of this program.

Use of Materials

The user should begin by watching the streamed video segment, or listening to the streamed audio segment, for the chapter before reading the text. The user may wish to make notes of the most important concepts and any terms that are new. Next, the user should review the learning objectives at the beginning of the chapter and read the chapter. The user should work through each of the examples, if any. After the user has studied each chapter, s/he should click on the link at the left to complete the interactive study questions. If the user answers a study question incorrectly, s/he should review the section of the text that is indicated at the end of the explanation to the study question to assure comprehension of the material. After the user has finished watching the streamed video, or listening to the streamed audio, and has read the text and worked through the study questions, s/he may wish to review her/his notes and any sections of the text or video/audio that were difficult. The user should review the learning objectives once more to consider achievement of the objectives. When the user is ready, s/he should click on the link to the left to complete the quizzer. The user's CPE certificate will be provided immediately upon successful completion of the quizzer.

Chapter 1 contains a discussion with Jennifer F. Louis, CPA, considering the guidance on independence from the American Institute of Certified Public Accountants (AICPA), the Government Accountability Office (GAO), and the International Federation of Accountants (IFAC).

Chapter 2 contains Comparing Ethics and Independence Codes of the AICPA, IFAC, and GAO, as supplemental material.

Chapter 3 contains review problems that help illustrate the topic.

• Identify when the AICPA standards apply

• Determine where the IFAC standards are located and certain characteristics of them

• Identify the primary threats to independence

• Identify some of the differences among the three sets (AICPA, GAO, IFAC) of standards