The interpretation of Rule 101,Independence,allows members to
A) Hold a material indirect interest in a client.
B) Have loans from a client that are collateralized by cash deposits held by the client.
C) Have home mortgages with a client even if they participate in the engagement.
D) Be a trustee of a client pension or profit sharing trust.

Question

Quizplus · Accepted Answer

According to Rule 101, independence would not allow members to hold a material indirect interest in a client or have home mortgages with a client if they participate in the engagement. However, having loans from a client that are collateralized by cash deposits held by the client is permissible under certain conditions. Being a trustee of a client pension or profit sharing trust is also allowed under certain circumstances. Therefore, the best choice would be B.

The Interpretation of Rule 101,Independence,allows Members to