Reporting When a Certified Public Accountant Is Not Independent
1. The purpose of this Statement is to clarify the position of the certified public accountant when he is considered not inde-pendent with respect to a client with whose financial state-ments he is associated (See Rule 1.01 of Article I of the Code of Professional Ethics) and to specify the type of disclaimer of opinion which the accountant should express in such circum-stances. This type of disclaimer applies whenever the certified public accountant is not independent, regardless of the extent of services performed. Thus it is applicable when the type of disclaimer illustrated in Statement on Auditing Procedure No. 38 would otherwise apply.
2. The second general standard of generally accepted audit-ing standards, as approved and adopted by the membership of the American Institute of Certified Public Accountants, requires that "In all matters relating to the assignment an independence in mental attitude is to be maintained by the auditor or auditors." (See paragraph 2, Chapter 2 of Statement on Auditing Proce-dure No. 33.) The independent auditor "must be without bias with respect to the client under audit, since otherwise he would lack that impartiality necessary for the dependability of his find-
Issued by the Committee on Auditing Procedure American Institute of Certified Public Accountants
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STATEMENT ON AUDITING PROCEDURE