The case of can Trinh Natee keep her San Natee?
Ethics
Charles Selcer, CPA, MBA | August/September 2022 Footnote
Editor's note: Updated July 28, 2022
Trinh Natee grew up in Vietnam but spent some time with her family in Sri Lanka. There she developed her own fusion cooking recipes, a combo of very spicy but still traditional Vietnamese food. After she arrived in Minneapolis, she opened a successful restaurant, Pho Fetched.
She obtained an SBA loan to expand and sell frozen prepared cuisine. The bank asked for an audited 2021 financial statement. Her uncle, San Natee, is a CPA and partner at a one-office Minneapolis CPA firm.
Q: Can Trinh engage her uncle’s firm to do the audit?
A. Yes. The definition of close relative includes parent, sibling or nondependent child, while immediate family member is a spouse, spousal equivalent or dependent. The uncle’s firm can be independent. These definitions are at 0.400.08 and 0.400.19, respectively. However, San should give consideration to 0.400.21a-b where it is noted:
- Independence of mind is a state of mind that permits a member to perform an attest service without being affected by influences that compromise professional judgment, thereby allowing an individual to act with integrity and exercise objectivity and professional skepticism.
- Independence in appearance is the avoidance of circumstances that would cause a reasonable and informed third party who has knowledge of all relevant information, including the safeguards applied, to reasonably conclude that the integrity, objectivity or professional skepticism of a firm or member of the attest engagement team is compromised.
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