The case of D’Zaster avoidance
Charles Selcer, CPA, MBA | April/May 2025 Footnote
Editor's note: Updated March 26, 2025
Joaquin D’Zaster, CPA is a partner at his CPA firm. During 2025, his wife, Todahl D’Zaster, who is a mechanical engineer, took a position as R&D director with a department budget of $350,000, at Mini Widget Manufacturing, a nano technology cutting edge company. Mini Widget is an audit client of Joaquin’s firm. Heretofore, Mini Widget, a small company, did not even have an R&D department.
Q. Can Joaquin’s CPA firm be independent on the 2025 financial statement audit?
A. Yes. If the R&D position does not have:
- Primary responsibility for significant accounting functions that support material.
- Components of the financial statements.
- Primary responsibility for the preparation of the financial statements; or the ability to exercise influence over the contents of the financial statements, including when the individual is a member of the board of directors or similar governing body, chief executive officer, president, chief financial officer, chief operating officer, general counsel, chief accounting officer, controller, director of internal audit, director of financial reporting, treasurer, or any equivalent position.
The above is the definition of “key position” at 0.400.29 in the Code.
