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

Question

Quizplus · Accepted Answer

The APES 110 Code of Ethics for Professional Accountants considers a material direct financial interest in an audit client to be the situation when the auditor has a loan from an audit client who is a financial institution. This is because this type of relationship can jeopardize the independence and objectivity of the auditor, as the auditor may be influenced to make decisions in favor of the audit client to maintain the loan relationship. The other options - providing taxation services, charging a fee contingent upon an outcome, accepting commissions from an audit client - may also create ethical concerns, but they are generally not considered material direct financial interests.

APES 110 Code of Ethics for Professional Accountants Considers a Material