Which of the following family relationships is most likely to impair a CPA's independence with respect to a particular audit client on which the CPA works as a "covered member"?

Question

Quizplus · Accepted Answer

The CPA's sister being the controller of the audit client represents a direct financial interest that is likely to impair the auditor's independence. This is because the sister has the power to influence or manipulate the financial information that will be audited by the CPA. This situation violates the ethical principle of independence, which requires auditors to be free from influences that compromise their professional judgment. The other options do not represent a significant threat to independence as the amount of investment is immaterial or unknown, and the savings plan participation is not a close family relationship.

Which of the Following Family Relationships Is Most Likely to Impair