An auditor's independence is considered impaired if the auditor has
A) an immaterial, indirect financial interest in a client.
B) an outstanding $8,000 balance on a credit card issued by a client.
C) an automobile loan from a client bank, collateralized by the automobile.
D) a joint, closely held business investment with the client that is material to the auditor's net worth.

Question

Quizplus · Accepted Answer

An auditor's independence is considered impaired if the auditor has a joint, closely held business investment with the client that is material to the auditor's net worth. The other options given do not necessarily impair independence, as they may be considered immaterial or indirect financial interests.

An Auditor's Independence Is Considered Impaired If the Auditor Has