The interpretations related to the rules governing objectivity or independence allow ________.
A) a public accountant (PA) to hold a material indirect interest in a client
B) a PA to finance a home mortgage with a client if the mortgage is made under the client's normal lending procedures and terms
C) a PA's spouse to hold a position as a director of a client's organization
D) a PA to serve as a trustee of the pension fund of a client

Question

Quizplus · Accepted Answer

The rules allow a PA to finance a home mortgage with a client if it is done under normal lending procedures and terms. Holding a material indirect interest in a client, having a spouse as a director of a client's organization, and serving as a trustee of a client's pension plan would all compromise the PA's objectivity or independence and are therefore prohibited.

The Interpretations Related to the Rules Governing Objectivity or Independence