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Current Interpretations of Rule 101 Are Listed Below Indicate Where

Question 86

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current Interpretations of Rule 101 are listed below Indicate where the item should appear.

Premises:

Responses:

Explains circumstances in which independence may be considered to be impaired as a result of litigation or the expressed intention to commence litigation.

101-1

Provides guidance on how various alternatives to “traditional structures” effect independence due to changes in the manner in which CPAs are structuring their practices.

101-2

Addresses financial interests and business relationships that impair independence.

101-3

A member issuing a report on a governmental client’s general purpose financial statements generally must be independent of the client, but independence is not required with respect to a related organization if the client is not financially accountable for the organization and the required disclosure does not include financial information.

101-4

Provides guidance when a member is asked to serve as an honorary or trustee for an attest client.

101-5

Independence will generally be considered to be impaired if, during the period of a professional engagement or at the time of expressing an opinion, a member’s firm had any joint business activity with the client that was material to the CPA’s firm or to the client.

101-6

Provides guidance on independence for engagements that are more limited in scope than an audit of general purpose financial statements.

101-8

Explains various ways in which a financial interest in a nonclient that has a significant influence on a client may impair independence with respect to a client.

101-11

Outlines important responsibility the client’s management must take in order to preserve independence.

101-12

101-13

101-14

101-10

Premises:

Explains circumstances in which independence may be considered to be impaired as a result of litigation or the expressed intention to commence litigation.

Provides guidance on how various alternatives to “traditional structures” effect independence due to changes in the manner in which CPAs are structuring their practices.

Addresses financial interests and business relationships that impair independence.

Provides guidance when a member is asked to serve as an honorary or trustee for an attest client.

Provides guidance on independence for engagements that are more limited in scope than an audit of general purpose financial statements.

Explains various ways in which a financial interest in a nonclient that has a significant influence on a client may impair independence with respect to a client.

Outlines important responsibility the client’s management must take in order to preserve independence.

Responses:

101-1

101-2

101-3

101-4

101-5

101-6

101-8

101-11

101-12

101-13

101-14

101-10

Correct Answer:

Premises:

Responses:

101-1

101-2

101-3

101-4

101-5

101-6

101-8

101-11

101-12

101-13

101-14

101-10