If a CPA faces legal action due to a minor amount claimed by a client, under what condition is their independence unaffected?

The rationale behind the choice that independence is unaffected if it does not involve an attest engagement stems from the fundamental principles governing CPA independence. In the context of CPA ethics, independence is primarily concerned with the objectivity and impartiality required when performing attest services—where the CPA reviews, audits, or provides assurance on financial statements.

When a CPA is not engaged in an attest engagement, their professional judgment and integrity remain intact, regardless of the legal action taken by a client for a minor claim. This means that the CPA can continue to operate without the constraints that legal disputes might impose on their independence in situations where attest engagements are performed.

In contrast, factors such as the amount of legal fees or the client’s significance as a source of income can introduce biases or pressures that might compromise independence, especially if they are related to attest engagements. Similarly, the outcome of legal actions, including whether damages are awarded, becomes less relevant in non-attest contexts since the foundational integrity expected in attest situations is what independence is primarily designed to protect.