APES 110 Code of Professional Conduct considers a material direct financial interest in an audit client to be:
A) the auditor having a loan from an audit client who is a financial institution.
B) charging a fee contingent upon an outcome.
C) accepting commissions from an audit client.
D) providing taxation services to a client.

Question

Quizplus · Accepted Answer

The APES 110 Code of Professional Conduct considers a material direct financial interest in an audit client to be when the auditor has a loan from an audit client who is a financial institution. This is because it creates a risk of the auditor being influenced by the client's financial interests, which could impact their independence and objectivity in performing the audit. Choices B, C, and D are not considered material direct financial interests under the code, but they may still create a perceived threat to independence that must be evaluated and addressed.

APES 110 Code of Professional Conduct Considers a Material Direct