American Institute of Certified Public Accountants (AICPA) Practice Exam

Do members not in public practice need to maintain the appearance of independence?

1. Yes, always

2. No, they do not

3. Only in certain situations

4. Only when audited

The correct answer is: No, they do not

Members not in public practice do not need to maintain the appearance of independence because they are not providing an independent audit or review of financial statements for clients. The concept of independence primarily applies to members in public practice who perform audits, reviews, or other attestation services, where their objectivity and integrity must be beyond question to maintain the trust of the users of the financial statements. For those not engaged in public practice, the same stringent requirements for independence do not apply. Their activities may involve work that doesn't require the same level of impartiality or skepticism toward their own or others' financial statements. Therefore, this distinction in roles allows members not in public practice to operate without the necessity of fostering an appearance of independence, as their work does not directly impact outside stakeholders in the same way as an audit would. In summary, the requirement for maintaining the appearance of independence is specifically tailored for members engaged in public practices, reflecting the need for credibility and trust in their outputs in relation to external clients or the public at large.