Impairments of independence can occur when:
A) A CPA owns a direct financial interest in a client
B) A CPA owns a material indirect financial interest in a client
C) Immediate family members of the CPA are in violation of the independence rules
D) All of the above

Question

Quizplus · Accepted Answer

All of the choices are situations where impairments of independence can occur. A CPA owning a direct or material indirect financial interest in a client, as well as immediate family members violating independence rules, can all compromise the objectivity and impartiality required for independent auditing. Therefore, it is important for CPAs to avoid these situations and maintain their independence to uphold their professional responsibilities.

Impairments of Independence Can Occur When