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In Goodbread’s case this refers to the fact that he had shares of stock (direct financial interest) in his possession when he was the audit engagement partner who oversaw the audit of Koger Properties, Inc.
Under the Generally Accepted Auditing Standards (GAAS) there are three sections, General Standards, Standards of Fieldwork, and Standards of Reporting. Under the General Standards section of GAAS there is a specific standard for independence and it reads, “The auditor must maintain independence in mental attitude in all matters relating to the audit.” (Messier, 42) Often times a distinction will be made between independence in fact and independence in appearance...
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