Generally, loans between a CPA firm or its members and an audit client are prohibited because it is a financial relationship. Which of the following, made under normal lending procedures, is not an exception to this rule?

Question

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The prohibition on loans between a CPA firm or its members and an audit client includes material loans made under normal lending procedures. Immaterial loans, home mortgages, and secured loans can be exceptions to this rule if they are made under normal lending procedures and do not create a financial relationship between the parties.

Generally, Loans Between a CPA Firm or Its Members and an Audit