In accordance with the Independence Rule,an ownership interest in an audit client is considered to be an indirect interest if:

Question

Quizplus · Accepted Answer

An ownership interest in an audit client is considered to be an indirect interest if the auditor benefits from it, but cannot meaningfully influence or control it. This is in line with the Independence Rule which requires auditors to maintain independence in order to ensure the integrity of the audit process. Option B is incorrect because a partnership interest in an audit client is considered to be a direct interest, and would result in a conflict of interest. Option C is incorrect because the benefits from an ownership interest that have accrued in the form of price appreciation but not realized are still considered to be a direct interest. Option D is incorrect because direct or indirect financial interests held by immediate family members of auditors are also considered direct interests.

In Accordance with the Independence Rule,an Ownership Interest in an Audit