American Institute of Certified Public Accountants (AICPA) Practice Exam

What is the independence requirement for a member in public practice when providing attestation services?

1. Must be independent in appearance only.

2. Must be independent in fact.

3. Must be independent only when clients are non-public.

4. Independence is not required for attestation services.

The correct answer is: Must be independent in fact.

The independence requirement for a member in public practice providing attestation services is fundamental to maintaining the integrity and credibility of the services rendered. Independence in fact refers to the auditor's state of mind, meaning that they must be unbiased and objective in their judgment without any influences or conflicts of interest. This requirement ensures that the auditor can impartially evaluate the financial information and issue reports based on their findings without being swayed by personal relationships, financial interests, or any other factors that could impair their judgment. Attestation services are designed to enhance the reliability of information prepared by someone other than the auditor, and thus, the necessity for independence is paramount. This ensures stakeholders can trust the attestation reports and the conclusions derived from them. Therefore, maintaining independence in both appearance and fact is critical, but the core requirement is true independence in fact, which effectively underpins the credibility of the attestation process.