The case of Hugh’s huge problem
Ethics
Charles Selcer, CPA, MBA | October 2020 Footnote
Editor's note: Updated September 30, 2020
Hugh Morron, CPA left QRT Investment Advisors in April 2020 to become an audit partner at Barnes & Ignoble (B&I), a firm with a large audit practice of brokerage firms. QRT Investment Advisors is an audit client of B&I. Hugh was not assigned to the engagement of QRT for its fiscal year ending July 31, 2020, but his new position, taking advantage of his long experience in brokerage firms, has him assigned as Engagement Quality Control Review (EQCR) on the QRT audit.
Q. Does that impair B&I’s independence?
A. Yes. Being EQCR means Hugh can influence the attest engagement. Independence is impaired and there are no safeguards to reduce this independence threat at an acceptable level. (See Code Section 1.277.010.03.)
