Section 101 - Independence[edit]
Section 101 sets forth the various requirements to establish auditor independence and conditions that nullify it. Knowingly allowing a member who is not independent to continue to work on an engagement can result in disciplinary action from the AICPA, including possible revocation of the members status as a CPA. Generally, the following actions will impair auditor independence:

* Authorizing, executing or consummating a transaction, or otherwise exercising authority on behalf of a client or having the authority to do so. * Preparing source documents, in electronic or other form, evidencing the occurrence of a transaction. * Having custody of client assets. * Supervising client employees in the performance of their normal recurring activities. * Determining which recommendations of the member should be implemented. * Reporting to the board of directors on behalf of management. * Serving as a client's stock transfer or escrow agent, registrar, general counsel or its equivalent. * Establishing or maintaining internal controls, including performing ongoing monitoring activities.

Auditor independence is impaired if a member on the engagement team has a direct or material indirect financial interest in the client. Member's on the engagement team are not allowed to be on the board of trustees of a trust that owns, or has committed to owning more than 10% of the client's equity. A member or any of their immediate family are not allowed to own more than 5% of the clients equity. For the period being audited, the auditor is not allowed to operate as an officer, director, manager, promoter, underwriter or voting trustee for the client. If a member leaves the auditing firm and is employed by the client, the entire firms independence is deemed to be impaired. If an audit member is made a job offer by the