Independence Question 1512

  • Anyone have any insight to this question and where to search. Parent (audited by EY)owns Sub 1 (audited by pwc). Sub 1 owns Sub 2(audited by KPMG). All are audited by different auditors because they are foreign. Now, the parent and sub 2 want to use pwc to do SO consulting/review–not the actual testing, just teh consulting. Is there an issue with using pwc beacuse if its relationship with sub 1. I have done research, but does not seem to be a clear answer. On paper, it seems odd because of the reliance of the Parent on Pwc(b/c Pwc audits Sub 1)–therefore may have some concerns, but unsure…any response would be helpful.

  • I would suspect that there is a serious conflict of duites there. In any case, PwC would also be aware of such a conflict and the risks associated with it.
    if the conflict is serious enough, PwC would get into a lot of trouble, so I am sure that they would review this in detail before accepting the engagement

  • It really looks like an independece conflict. PwC may search in its Independence database for assurance about if accept or not the engagement. But i would say, the answer is they would not accept it.
    I had a situation a little less complicated, where the decission was not accept the engagement (and it was just for a consulting one…)

  • Looks like you need to use D-and-T 😉

  • Looks like you need to use D-and-T 😉
    I feel sorry for them already.

Log in to reply