Julie Webb,CPA takes out an automobile loan with First National Bank of Wellville (FNBW)while attending the University of Wellville.Julie graduates one year later and is hired as an auditor by Best and Driftwood,LLP.Her first assigned audit engagement is with First National Bank of Wellville,a client of Best and Driftwood.As a new audit assistant,Julie continues to pay her automobile loan payments each month.According to the AICPA,why is Julie is considered a covered member for FNBW independence purposes?
A)She will be working on the engagement.
B)She has a direct financial interest in FNBW.
C)She graduated in the same area as the client is operating.
D)She has an immaterial direct financial interest in FNBW.

Question

Quizplus · Accepted Answer

The AICPA considers Julie a covered member because she will be working on the audit engagement for FNBW, which means she has the potential to influence the financial statements and disclose any issues with the bank's loan practices, including her own automobile loan. Even though Julie's financial interest in FNBW is immaterial, she is still considered a covered member. Graduating from the same area as the client is not a factor in determining covered member status.

Julie Webb,CPA Takes Out an Automobile Loan with First National