Erica Gray, CPA, is a sole practitioner. She has been practicing as an auditor for 10 years. Recently a long-standing audit client asked Gray to design and implement an integrated computer-based accou

Auditing standards are mainly concerned with ensuring that auditors approach their work with objectivity and impartiality. Independence in fact ensures that the auditor is not influenced by any financial or personal interests that may compromise their judgment. This means that the auditor should not have any direct or indirect financial interest in the company being audited, including a financial or business relationship that could influence the auditor's judgment. Independence in appearance, on the other hand, is concerned with the perception of independence by the public. It ensures that the auditor's relationship with the client is not such that it may cause the public to question the auditor's judgment, thereby diminishing public confidence in the audit. It is important that auditors remain independent of their clients to maintain the integrity of the audit process. The purpose of an audit is to provide an independent opinion on the accuracy and completeness of a company's financial statements, which is crucial for investors and other stakeholders in decision-making. The auditor's independence ensures that this opinion is made without any bias or influence, which increases the credibility of the audit report. In this case, it would not be appropriate for Erica Gray to accept the engagement to design and implement the client's accounting information system and remain independent during subsequent audits. This is because the nature of the engagement involves taking on a role that may compromise her objectivity in evaluating the client's accounting system and records during future audits. Designing and implementing the system could lead to a vested financial and personal interest in the client, which would compromise both independence in fact and appearance. Therefore, it is not advisable for Gray to accept the engagement.