American Institute of Certified Public Accountants (AICPA) Practice Exam

To ensure independence in audits, CPAs focus on avoiding relationships or situations that could impair their objectivity. Maintaining professional skepticism and impartiality is crucial in the auditing process, as it allows auditors to evaluate financial statements and internal controls without bias. Independence is essential for upholding the integrity of the audit process, which ultimately fosters trust and reliability in the financial reporting of an organization.

The concept of independence encompasses both independence in appearance and independence in fact. By steering clear of any personal or financial interests that may influence their judgment, CPAs are better positioned to provide an unbiased assessment of the financial statements they are auditing. This commitment to objectivity is foundational to maintaining the credibility of the audit profession.

On the other hand, strengthening ties with clients or having close relationships could compromise objectivity, leading to potential conflicts of interest. Sharing audit data with stakeholders could also lead to the perception of a lack of independence, as stakeholders may question the auditor's impartiality. Regularly rotating audit teams can be a good practice for maintaining independence but is not the primary way CPAs ensure objectivity. Hence, the focus on avoiding conflicting relationships is the most direct approach to maintaining independence in audits.