Which of the following is allowable for a CPA?
A)A used car loan from a banking client where the client has a lien on the car.
B)An uncollateralized signature loan from a client.
C)Owning more than five percent of the outstanding shares of client stock in a retirement account.
D)The audit engagement partner (or partner equivalent)serves on the client's audit committee.

Question

Quizplus · Accepted Answer

A used car loan from a banking client where the client has a lien on the car is an allowable loan as it is a secured loan.

Answer: C
 Owning more than five percent of the outstanding shares of client stock in a retirement account is allowable as long as the CPA does not have significant influence over the client.

Answer: D
 The audit engagement partner (or partner equivalent) serving on the client's audit committee is not allowable as it creates a conflict of interest and impairs independence.

Which of the Following Is Allowable for a CPA