Q:

In which of the following situations would a CPA\'s independence be considered impaired according to the Code of Professional Conduct?

belongs to book: AUDITING & ASSURANCE SERVICES | A Systematic Approach|William F.Messier, Steven M.Glover, Douglas F. Prawitt|10th Edition| Chapter number:19| Question number:19.18

Ibrahimhamm

Save to bookmark

|

2022-07-05

|

113

0

In which of the following situations would a CPA's independence be considered impaired according to the Code of Professional Conduct?

The CPA has a car loan from a bank that is an audit entity. The loan was made under the same terms available to all customers.
The CPA has a car loan from a bank that is an audit entity. The loan was made under the same terms available to all customers.
The CPA owns a commercial building and leases it to an audit entity. The rental income is material to the CPA.

Accounting, textbook solutions, MCQ Questions, Accounting textbook-solutions, Accounting MCQ-questions,

login and add your own answer to this question

All Answers

Ibrahimhamm

2022-07-05

need an explanation for this answer? contact us directly to get an explanation for this answer

B. The CPA has a direct financial interest in an audit entity, but the interest is maintained in a blind trust.

C. The CPA owns a commercial building and leases it to an audit entity. The rental income is material to the CPA.

The direct financial interest in an audit client and the material business relationship with an audit client impair the CPA's independence. Automobile loans from financial institution clients are allowed if made under the same terms as avaiable to all of the financial institution's customers.

need an explanation for this answer? contact us directly to get an explanation for this answer

total answers (1)