The case of the Velva teen auditor
Ethics
Charles Selcer, CPA, MBA | October/November 2024 Footnote
Editor's note: Updated October 1, 2024
Sven Skarnasdag is a 19-year-old partner at the CPA firm Loota & Fisk (L&F) — a real prodigy. One of the firm’s attest function clients is the Lutheran Church of Velva. He volunteers at the church as its controller. There are no other employees in the church’s accounting department, so it can be asserted that Sven’s duties affect the financial statements of the entity.
Q. Can L&F be independent?
A. No. PEEC is clarifying the definition of simultaneously employed or associated as follows:
When a partner or professional employee of the member’s firm serves in a governance role or as an employee of an attest client during the period of the professional engagement. This includes contractual or volunteer positions at the attest client.
A governance role is a role in which the partner or professional employee meets the definition of those charged with governance.
The aforementioned is at ET 0.400.48.
Those charged with governance includes overseeing the financial reporting process (see ET 0.400.51).
