Under the ethical standards of the profession, which of the following situations involvingnondependent members of an auditor's family is most likely to impair the auditor'sindependence?a. A parent's immaterial investment in a client.b.A first cousin's loan from a client.c. A sibling's loan to a director of a client.d.A spouse's employment with a client.ExplanationChoice "d" is correct. Under Rule 101 of the Code of Professional Conduct, independencerequirements extend to the member's spouse, dependent children, and dependent relatives. Aspouse working for a client is considered part of the class of "members" subject to independencerequirements.Choices "a", "b", and "c" are incorrect. These choices do not, by definition, fall within the"member" class.
Under the ethical standards of the profession, which of the following investments in a client isnotconsidered to be a direct financial interest?
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