(1)
Independence. A certified public accountant or a firm of which the licensee is a partner, shareholder or member shall not express an opinion on financial statements of an enterprise unless the licensee or the licensee's firm are independent with respect to such enterprise. Independence will be considered to be impaired if, for example:
(a) During the period of the licensee's professional engagement, or at the time of expressing the licensee's opinion, the licensee or the licensee's firm:
1. Had or was committed to acquire any direct or indirect financial interest in the enterprise;
2. Had any joint closely held business investment with the enterprise or any officer, director, member or principal stockholder; or
3. Had any loan to or from the enterprise or any officer, director, member or principal stockholder thereof. This latter proscription does not apply to the following loans from a financial institution when made under normal lending procedures, terms, and requirements: loans obtained by a member of the licensee's firm which are not material in relation to the net worth of such borrower; home mortgages; other secured loans, except loans guaranteed by member's firm which are otherwise unsecured.
(b) During the period covered by the financial statements, during the period of the professional engagement or at the time of expressing an opinion the licensee or the licensee's firm:
1. Was connected with the enterprise as a promoter, underwriter or voting trustee, a director or officer or in any capacity equivalent to that of a member of management or of any employee; or
2. Was a trustee of any trust or executor or administrator of any estate, if such trust or estate had a direct or indirect financial interest in the enterprise; or was a trustee for any pension or profit-sharing trust of the enterprise.
(2)
Integrity and Objectivity. A certified public accountant shall not knowingly misrepresent facts, and when engaged in the practice of public accounting, including the rendering of tax, management advisory, or other financial services, shall not subordinate his or her judgment to others. In tax practice a certified public accountant may resolve doubt in favor of the licensee's client as long as there is reasonable support for the licensee's position.
