Section 16-71-61 - Independence, integrity, and objectivity(a) A licensee shall not express an opinion on financial statements of an enterprise in a manner as to imply that the licensee is acting as an independent public accountant with respect thereto unless the licensee is independent with respect to the enterprise. Independence shall be considered to be impaired if, for example:
(1) During the period of the licensee's professional engagement, or at the time of expressing an opinion, the licensee: (A) Had acquired or was committed to acquire any direct or material indirect financial interest in the enterprise;(B) Was a trustee, executor, or administrator of any trust or estate which had acquired or was committed to acquire any direct or material indirect financial interest in the enterprise;(C) Had any joint closely held business investment with the enterprise or any officer, director, or principal stockholder thereof which was material in relation to the net worth of either the licensee or the enterprise; or(D) Had any loan to or from the enterprise or any officer, director, or principal stockholder thereof other than loans of the following kinds made by a financial institution under normal lending procedures, terms, and requirements: (i) Loans obtained by the licensee which are not material in relation to the net worth of the borrower;(iii) Other secured loans, except those secured solely by a guarantee of the licensee; (2) 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: (A) Was connected with the enterprise as a promoter, underwriter, voting trustee, director, or officer, or in any capacity equivalent to a member of management or of an employee; or(B) Was a trustee of any pension or profitsharing trust of the enterprise. Paragraphs (1) and (2) are not intended to be all-inclusive examples.(b) A licensee, in the performance of professional services shall not knowingly misrepresent facts and shall not subordinate the licensee's judgment to others. In tax practice, however, a licensee may resolve doubt in favor of a client as long as there is reasonable support for the position.(c) A licensee shall not pay a commission to obtain a client, nor accept a commission for a referral to a client of products or services of others. This subsection shall not prohibit payments for the purpose of all, or a material part, of an accounting practice or retirement payments to persons formerly engaged in the practice of public accountancy, or payments to the heirs or estates of those persons.(d) A licensee shall not offer or perform professional services for a fee which is contingent upon the findings or results of those services; provided this subsection shall not apply to professional services involving federal, state, or other taxes in which the findings are those of the tax authorities and not those of the licensee, nor shall it apply to professional services for which the fees are to be fixed by courts or other public authorities, and which are, therefore, indeterminate in amount at the time the professional services are undertaken.(e) A licensee shall not concurrently engage in the practice of public accountancy and in any other business or occupation which impairs the licensee's independence or objectivity in rendering professional services. [Eff 3/6/80; am and ren § 16-71-61, 6/25/81; am and comp 6/8/84; am and comp 10/23/87; am and comp 2/22/94; comp 6/3/95; comp 1/22/01; comp 1/30/10; comp 2/13/12] (Auth: HRS § 466-4) (Imp: HRS § 466-4)