Impairments of independence can occur when:
A) A CPA owns a direct financial interest in a client
B) A CPA owns a material indirect financial interest in a client
C) Immediate family members of the CPA are in violation of the independence rules
D) All of these

Question

Quizplus · Accepted Answer

All of these options can impair a CPA's independence according to the AICPA Code of Professional Conduct. A direct or material indirect financial interest in a client creates a conflict of interest and undermines the objectivity and independence of the CPA. Violations by immediate family members can also create a perception of lack of independence. Therefore, all of these impairments (ownership of direct or indirect financial interests and violations by immediate family members) can cause independence to be compromised.

Impairments of Independence Can Occur When