The case of the vacation getaway no way
Ethics
Charles Selcer, CPA, MBA | December/January 2025 Footnote
Editor's note: Updated December 4, 2024
Jerry Rigged, CPA owns a vacation home in partnership with an old high school buddy, Vlad Diempaler. One weekend, Vlad told Jerry he was unhappy with his auditors and wanted to hire Jerry’s firm, Rigged and Tide CPAs, to do his 2024 audit. Vlad and Jerry shared the $1 million cost of buying the vacation home. Neither party has plans to sell their interest to the other. They use the vacation home on alternating weekends as a family retreat only.
Q. Can Jerry’s firm accept the audit engagement?
A. No. They would not be independent.
At 1.265.020, it is noted that if the joint closely held material investment is owned by the covered member during the period of professional engagement, independence would be impaired.
