The material financial interests rule means that:
A) an auditor cannot be assigned to the audit of a bank with which that auditor has a home mortgage.
B) an auditor should be involved in the executive function of a client to maximise the benefits achieved from the engagement.
C) a public accounting firm cannot accept an audit client if anyone in the practice has a material shareholding in the potential client.
D) an auditor cannot accept payment from the auditee.

Question

Quizplus · Accepted Answer

The material financial interests rule states that a public accounting firm cannot accept an audit client if anyone in the practice has a material shareholding in the potential client. This is to avoid any conflicts of interest or bias in the audit process. Choices A, B and D are incorrect as they do not accurately describe the material financial interests rule.

The Material Financial Interests Rule Means That