AUD 2 Professional Responsibilities and Ethics 2 Flashcards
A member who possesses a direct or material indirect financial interest in an attest client creates a self-interest threat that cannot be reduced to an _________ level and the member’s __________ would be impaired.
A member who possesses a direct or material indirect financial interest in an attest client creates a self-interest threat that cannot be reduced to an acceptable level and the member’s independence would be impaired.
Financial interests in retirement, savings, compensation, or similar firm-sponsored plans may be direct or indirect financial interests, based on circumstances.
• Investments in a firm-sponsored plan are \_\_\_\_\_ financial interests of the firm.
Financial interests in retirement, savings, compensation, or similar firm-sponsored plans may be direct or indirect financial interests, based on circumstances.
• Investments in a firm-sponsored plan are direct financial interests of the firm.
Financial interests in retirement, savings, compensation, or similar firm-sponsored plans may be direct or indirect financial interests, based on circumstances.
• The ability to supervise or participate in a plan’s investment decisions creates a \_\_\_\_\_ financial interest while the inability to do so results in an indirect financial interest.
Financial interests in retirement, savings, compensation, or similar firm-sponsored plans may be direct or indirect financial interests, based on circumstances.
• The ability to supervise or participate in a plan’s investment decisions creates a direct financial interest while the inability to do so results in an indirect financial interest.
Financial interests in retirement, savings, compensation, or similar firm-sponsored plans may be direct or indirect financial interests, based on circumstances.
• Financial interests held by a defined benefit plan are only considered the financial interest of a member who is a trustee or otherwise supervises or participates in the plan’s investment d\_\_\_\_\_\_\_\_s.
Financial interests in retirement, savings, compensation, or similar firm-sponsored plans may be direct or indirect financial interests, based on circumstances.
• Financial interests held by a defined benefit plan are only considered the financial interest of a member who is a trustee or otherwise supervises or participates in the plan’s investment decisions.
Financial interests in retirement, savings, compensation, or similar firm-sponsored plans may be direct or indirect financial interests, based on circumstances.
• Allocated shares held in an employee stock ownership plan (ESOP) are \_\_\_\_\_\_ financial interests until the member has the right to dispose of the allocated shares of the ESOP.
Financial interests in retirement, savings, compensation, or similar firm-sponsored plans may be direct or indirect financial interests, based on circumstances.
• Allocated shares held in an employee stock ownership plan (ESOP) are indirect financial interests until the member has the right to dispose of the allocated shares of the ESOP.
Financial interests in retirement, savings, compensation, or similar firm-sponsored plans may be direct or indirect financial interests, based on circumstances.
• Interests resulting from share-based compensation arrangements, including rights to acquire equity interests and restricted stock awards are \_\_\_\_\_ financial interests even if they are not vested or exercisable.
Financial interests in retirement, savings, compensation, or similar firm-sponsored plans may be direct or indirect financial interests, based on circumstances.
• Interests resulting from share-based compensation arrangements, including rights to acquire equity interests and restricted stock awards are direct financial interests even if they are not vested or exercisable.
Financial interests in retirement, savings, compensation, or similar firm-sponsored plans may be direct or indirect financial interests, based on circumstances.
Examples:
Financial interests in retirement, savings, compensation, or similar firm-sponsored plans may be direct or indirect financial interests, based on circumstances.
* Investments in a firm-sponsored plan are direct financial interests of the firm.
* The ability to supervise or participate in a plan’s investment decisions creates a direct financial interest while the inability to do so results in an indirect financial interest.
* Financial interests held by a defined benefit plan are only considered the financial interest of a member who is a trustee or otherwise supervises or participates in the plan’s investment decisions.
* Allocated shares held in an employee stock ownership plan (ESOP) are indirect financial interests until the member has the right to dispose of the allocated shares of the ESOP.
* Interests resulting from share-based compensation arrangements, including rights to acquire equity interests and restricted stock awards are direct financial interests even if they are not vested or exercisable.
A partnership interest is a _____ financial interest in a general.
A partnership interest is a direct financial interest in a genera.
A partnership interest is a ______ financial interest in a general or a limited partnership.
• A general partner has a \_\_\_\_\_ financial interest in the partnership’s financial interests.
A partnership interest is a direct financial interest in a general or a limited partnership.
• A general partner has a direct financial interest in the partnership’s financial interests.
A partnership interest is a ______ financial interest in a general or a limited partnership.
• A limited partner has an \_\_\_\_\_\_\_\_ financial interest in the partnership’s financial interests
unless the limited partner controls the partnership, supervises or participates in the partnership’s investment decisions, or has the ability to replace the general partner or participate in investment decisions, in which case the interest is ______.
A partnership interest is a direct financial interest in a general or a limited partnership.
* A general partner has a direct financial interest in the partnership’s financial interests.
* A limited partner has an indirect financial interest in the partnership’s financial interests
unless the limited partner controls the partnership, supervises or participates in the partnership’s investment decisions, or has the ability to replace the general partner or participate in investment decisions, in which case the interest is direct.
An ownership interest in a limited liability company (LLC) is a ______ financial interest in the LLC.
An ownership interest in a limited liability company (LLC) is a direct financial interest in the LLC.
An ownership interest in a limited liability company (LLC) is a ______ financial interest in the LLC.
• The managing member and those with the ability to control, supervise, or participate in the LLC’s investment decisions have \_\_\_\_ financial interests in the LLC’s financial interests.
An ownership interest in a limited liability company (LLC) is a direct financial interest in the LLC.
• The managing member and those with the ability to control, supervise, or participate in the LLC’s investment decisions have direct financial interests in the LLC’s financial interests.
An ownership interest in a limited liability company (LLC) is a ______ financial interest in the LLC.
• Others without the ability to control, supervise, or participate in the LLC’s investment decisions have \_\_\_\_\_\_\_ financial interests.
An ownership interest in a limited liability company (LLC) is a direct financial interest in the LLC.
• Others without the ability to control, supervise, or participate in the LLC’s investment decisions have indirect financial interests.
An ownership interest in a limited liability company (LLC) is a ______ financial interest in the LLC.
* The managing member and those with the ability to control, supervise, or participate in the LLC’s investment decisions have \_\_\_\_ financial interests in the LLC’s financial interests.
* Others without the ability to control, supervise, or participate in the LLC’s investment decisions have \_\_\_\_\_\_\_ financial interests.
An ownership interest in a limited liability company (LLC) is a direct financial interest in the LLC.
* The managing member and those with the ability to control, supervise, or participate in the LLC’s investment decisions have direct financial interests in the LLC’s financial interests.
* Others without the ability to control, supervise, or participate in the LLC’s investment decisions have indirect financial interests.
The account owner of a Section 529 plan (Education savings plan) has a ______ financial interest in the plan, but beneficiaries do not have a direct or indirect financial interest in the plan.
The account owner of a Section 529 plan (Education savings plan) has a direct financial interest in the plan, but beneficiaries do not have a direct or indirect financial interest in the plan.
The account owner of a Section 529 plan (Education savings plan) has a direct financial interest in the plan, but beneficiaries do not have a ______ or ________ financial interest in the plan.
The account owner of a Section 529 plan (Education savings plan) has a direct financial interest in the plan, but beneficiaries do not have a direct or indirect financial interest in the plan.
If an estate or trust has any direct or any material indirect financial interest in an attest client, a threat to the member’s ___________ would not be at an acceptable level
if the member served as trustee of the trust, or executor or administrator of the estate, during the period of the professional engagement
if any of the following also applied:
- The member had the authority to make investment decisions for the trust or estate;
- The trust or estate either owned an equity interest in excess of 10% of the attest client’s outstanding equity securities; or
- The value of the equity interest in the attest client exceeded 10% of the total assets of the trust or estate.
Trusts and Estates
If an estate or trust has any direct or any material indirect financial interest in an attest client, a threat to the member’s independence would not be at an acceptable level if the member served as trustee of the trust, or executor or administrator of the estate, during the period of the professional engagement if any of the following also applied:
- The member had the authority to make investment decisions for the trust or estate;
- The trust or estate either owned, or was committed to acquire, an equity interest in excess of 10% of the attest client’s outstanding equity securities; or
- The value of the equity interest in the attest client exceeded 10% of the total assets of the trust or estate.
When the CPA is the grantor of a trust, the trust and its investments are considered _____ financial interests of the CPA,
even if the trust is a blind trust, if the trust’s investments ultimately revert to the CPA, or if the CPA:
- Can amend or revoke the trust;
- Has the authority to control the trust; or
- Has the ability to participate in, or supervise, the trust’s investment decisions.
If none of those circumstances apply, the CPA has a _____ financial interest in the trust and an indirect financial interest in the trust’s underlying investments.
When the CPA is the grantor of a trust, the trust and its investments are considered direct financial interests of the CPA,
even if the trust is a blind trust, if the trust’s investments ultimately revert to the CPA, or if the CPA:
- Can amend or revoke the trust;
- Has the authority to control the trust; or
- Has the ability to participate in, or supervise, the trust’s investment decisions.
If none of those circumstances apply, the CPA has a direct financial interest in the trust and an indirect financial interest in the trust’s underlying investments.
When a CPA is a participant in an employee benefit plan that is either sponsored by an attest client or is, itself, an attest client, ____________ is generally impaired due to the s___ - ________ threat.
Participation in Employee Benefit Plans
When a CPA is a participant in an employee benefit plan that is either sponsored by an attest client or is, itself, an attest client, independence is generally impaired due to the self-interest threat.
When a CPA is a participant in an employee benefit plan, independence is generally impaired due to the self-interest threat.
The threat would be reduced to an _________ level in certain circumstances the CPA is a participant in a public employee retirement plan that is sponsored by more than one governmental organization, one of which is the employer of the CPA.
Participation in Employee Benefit Plans
When a CPA is a participant in an employee benefit plan that is either sponsored by an attest client or is, itself, an attest client, independence is generally impaired due to the self-interest threat.
The threat would be reduced to an acceptable level, however, in certain circumstances the CPA is a participant in a public employee retirement plan that is sponsored by more than one governmental organization, one of which is the employer of the CPA.
plied with.
When a CPA is a participant in an employee benefit plan, independence is generally impaired due to the self-interest threat.
The threat would be reduced to an acceptable level in certain circumstances the CPA is a participant in a public employee retirement plan that is sponsored by more than one governmental organization, one of which is the employer of the CPA.
In addition:
• The CPA is required as an employee to p_______ in the plan, which is offered to all employees in comparable positions;
Participation in Employee Benefit Plans
When a CPA is a participant in an employee benefit plan that is either sponsored by an attest client or is, itself, an attest client, independence is generally impaired due to the self-interest threat.
The threat would be reduced to an acceptable level, however, in certain circumstances the CPA is a participant in a public employee retirement plan that is sponsored by more than one governmental organization, one of which is the employer of the CPA.
In addition:
- The CPA is required as an employee to participate in the plan, which is offered to all employees in comparable positions;
- The CPA does not influence or control key aspects of the plan such as investment strategy, benefits, or other management activities; and
- The CPA may not serve in a role prohibited by ET 1.275, Current Employment or Association with an Attest Client.
When, as a result of an immediate family member’s employment, that family member is a participant in a plan that is an attest client or is sponsored by an attest client, the requirements of ET 1.270, Family Relationships with Attest Clients, are to be complied with.
When a CPA is a participant in an employee benefit plan, independence is generally impaired due to the self-interest threat.
The threat would be reduced to an acceptable level in certain circumstances the CPA is a participant in a public employee retirement plan that is sponsored by more than one governmental organization, one of which is the employer of the CPA.
In addition:
• The CPA is required as an employee to p_______ in the plan, which is offered to all employees in comparable positions;
Participation in Employee Benefit Plans
When a CPA is a participant in an employee benefit plan that is either sponsored by an attest client or is, itself, an attest client, independence is generally impaired due to the self-interest threat.
The threat would be reduced to an acceptable level, however, in certain circumstances the CPA is a participant in a public employee retirement plan that is sponsored by more than one governmental organization, one of which is the employer of the CPA.
In addition:
- The CPA is required as an employee to participate in the plan, which is offered to all employees in comparable positions;
- The CPA does not influence or control key aspects of the plan such as investment strategy, benefits, or other management activities; and
- The CPA may not serve in a role prohibited by ET 1.275, Current Employment or Association with an Attest Client.
When, as a result of an immediate family member’s employment, that family member is a participant in a plan that is an attest client or is sponsored by an attest client, the requirements of ET 1.270, Family Relationships with Attest Clients, are to be complied with.
The threat would be reduced to an acceptable level, however, in certain circumstances the CPA is a participant in a public employee retirement plan that is sponsored by more than one g_________ organization, one of which is the employer of the CPA.
In addition:
• The CPA does not influence or control key aspects of the plan such as investment strategy, benefits, or other management activities;
The threat would be reduced to an acceptable level, however, in certain circumstances the CPA is a participant in a public employee retirement plan that is sponsored by more than one governmental organization, one of which is the employer of the CPA.
In addition:
• The CPA does not influence or control key aspects of the plan such as investment strategy, benefits, or other management activities;
A firm may have funds on deposit at an attest client that is a bank or similar depository institution without impairing its independence as long as the firm concludes that the likelihood that the institution will experience financial difficulties is r______.
Depository, Brokerage, and Other Accounts
A firm may have funds on deposit at an attest client that is a bank or similar depository institution without impairing its independence as long as the firm concludes that the likelihood that the institution will experience financial difficulties is remote.
A firm may have funds on deposit at an attest client that is a bank or similar depository institution without impairing its independence as long as the firm concludes that the likelihood that the institution will experience financial difficulties is remote.
An individual’s ____________ would not be impaired as long as:
- The balance on deposit is fully insured; or
- The aggregate of uninsured amounts is not material to the individual; or
- Uninsured amounts that are considered material are reduced to an amount that is not material within 30 days of when it became, or becomes, material to the individual.
Depository, Brokerage, and Other Accounts
A firm may have funds on deposit at an attest client that is a bank or similar depository institution without impairing its independence as long as the firm concludes that the likelihood that the institution will experience financial difficulties is remote.
An individual’s independence would not be impaired as long as:
- The balance on deposit is fully insured; or
- The aggregate of uninsured amounts is not material to the individual; or
- Uninsured amounts that are considered material are reduced to an amount that is not material within 30 days of when it became, or becomes, material to the individual.
When a CPA maintains brokerage or other accounts with an attest client that is an insurance company, investment advisor, broker-dealer, bank, or other member of the financial services industry, impairment of independence may be avoided if certain s________s are in place:
Depository, Brokerage, and Other Accounts
When a CPA maintains brokerage or other accounts with an attest client that is an insurance company, investment advisor, broker-dealer, bank, or other member of the financial services industry, impairment of independence may be avoided if certain safeguards are in place:
When a CPA maintains brokerage or other accounts with an _____ client that is an insurance company, investment advisor, broker-dealer, bank, or other member of the financial services industry, impairment of independence may be avoided if certain safeguards are in place:
Depository, Brokerage, and Other Accounts
When a CPA maintains brokerage or other accounts with an attest client that is an insurance company, investment advisor, broker-dealer, bank, or other member of the financial services industry, impairment of independence may be avoided if certain safeguards are in place:
When a CPA maintains brokerage or other accounts with an ____ client that is an insurance company, investment advisor, broker-dealer, bank, or other member of the financial services industry, impairment of independence may be avoided if certain safeguards are in place:
- The ______ client is providing services applying its normal terms, procedures, and requirements; and
- Any risk of loss, such as from the client’s bankruptcy, insolvency, fraud or illegal acts, or other circumstances, is not material to the individual after considering protections from federal, state, or other insurers or from other sources.
Depository, Brokerage, and Other Accounts
When a CPA maintains brokerage or other accounts with an attest client that is an insurance company, investment advisor, broker-dealer, bank, or other member of the financial services industry, impairment of independence may be avoided if certain safeguards are in place:
- The attest client is providing services applying its normal terms, procedures, and requirements; and
- Any risk of loss, such as from the client’s bankruptcy, insolvency, fraud or illegal acts, or other circumstances, is not material to the individual after considering protections from federal, state, or other insurers or from other sources.
Depository, Brokerage, and Other Accounts
An individual’s independence would not be impaired as long as:
- The balance on deposit is fully insured; or
- The aggregate of uninsured amounts is not _______ to the individual; or
- Uninsured amounts that are considered ________ are reduced to an amount that is not _______ within __ days of when it became, or becomes, material to the individual.
Depository, Brokerage, and Other Accounts
A firm may have funds on deposit at an attest client that is a bank or similar depository institution without impairing its independence as long as the firm concludes that the likelihood that the institution will experience financial difficulties is remote.
An individual’s independence would not be impaired as long as:
- The balance on deposit is fully insured; or
- The aggregate of uninsured amounts is not material to the individual; or
- Uninsured amounts that are considered material are reduced to an amount that is not material within 30 days of when it became, or becomes, material to the individual.
An insurance policy from a stock or mutual life insurance company is not considered a financial interest unless the policy offers the policy holder an investment option.
Holding such a policy would create a ___-_____ threat to independence only if the policy was not obtained under the issuing entity’s normal terms, procedures, and requirements.
An insurance policy from a stock or mutual life insurance company is not considered a financial interest unless the policy offers the policy holder an investment option.
Holding such a policy would create a self-interest threat to independence only if the policy was not obtained under the issuing entity’s normal terms, procedures, and requirements.
An insurance policy from a stock or mutual life insurance company is not considered a _______ interest unless the policy offers the policy holder an investment option.
Holding such a policy would create a self-interest threat to independence only if the policy was not obtained under the issuing entity’s normal terms, procedures, and requirements.
An insurance policy from a stock or mutual life insurance company is not considered a financial interest unless the policy offers the policy holder an investment option.
Holding such a policy would create a self-interest threat to independence only if the policy was not obtained under the issuing entity’s normal terms, procedures, and requirements.
An insurance policy from a stock or mutual life insurance company is not considered a financial interest unless the policy offers the policy holder an investment option.
Holding such a policy would create a self-interest threat to ___________ only if the policy was not obtained under the issuing entity’s normal terms, procedures, and requirements.
Holding such a policy would create a self-interest threat to independence only if the policy was not obtained under the issuing entity’s normal terms, procedures, and requirements.
When a CPA holds an insurance policy with an investment option, _________ may be impaired.
Depository, Brokerage, and Other Accounts
When a CPA holds an insurance policy with an investment option, independence may be impaired.
When a CPA holds an insurance policy with an _________ option, independence may be impaired.
Depository, Brokerage, and Other Accounts
When a CPA holds an insurance policy with an investment option, independence may be impaired.
When a CPA holds an insurance policy with an investment option, independence may be impaired.
• If not obtained under the insurer’s normal terms, procedures, and requirements, threats to ____________ would not be at an acceptable level.
Depository, Brokerage, and Other Accounts
• If not obtained under the insurer’s normal terms, procedures, and requirements, threats to independence would not be at an acceptable level.
When a CPA holds an insurance policy with an investment option, independence may be impaired.
• When obtained under the insurer’s normal terms, procedures, and requirements, a ____ financial interest would be created if the CPA participates in or oversees investment decisions and the s___ - _______ threat would be at an unacceptable level
Depository, Brokerage, and Other Accounts
• When obtained under the insurer’s normal terms, procedures, and requirements, a direct financial interest would be created if the CPA participates in or oversees investment decisions and the self-interest threat would be at an unacceptable level
When a CPA holds an insurance policy with an investment option, independence may be impaired.
• When obtained under the insurer’s normal terms, procedures, and requirements, a _____ financial interest would be created if the CPA participates in or oversees investment decisions and the self-interest threat would be at an unacceptable level
Depository, Brokerage, and Other Accounts
• When obtained under the insurer’s normal terms, procedures, and requirements, a direct financial interest would be created if the CPA participates in or oversees investment decisions and the self-interest threat would be at an unacceptable level
Loans to or from an attest client, an officer or director of an attest client, or an individual owning __% or more of an attest client’s outstanding ownership interests create a self-interest threat that may not be at an acceptable level.
Loans, Leases, and Guarantees
Loans to or from an attest client, an officer or director of an attest client, or an individual owning 10% or more of an attest client’s outstanding ownership interests create a self-interest threat that may not be at an acceptable level.
Loans to or from an _____ client, an officer or director of an attest client, or an individual owning 10% or more of an ______ client’s outstanding ownership interests create a self-interest threat that may not be at an acceptable level.
Loans, Leases, and Guarantees
Loans to or from an attest client, an officer or director of an attest client, or an individual owning 10% or more of an attest client’s outstanding ownership interests create a self-interest threat that may not be at an acceptable level.
Loans to or from an attest client, an officer or director of an attest client, or an individual owning 10% or more of an attest client’s outstanding ownership interests create a ____ - ________ threat that may not be at an acceptable level.
Loans, Leases, and Guarantees
Loans to or from an attest client, an officer or director of an attest client, or an individual owning 10% or more of an attest client’s outstanding ownership interests create a self-interest threat that may not be at an acceptable level.
Unsecured loans that are not material to the CPA’s net worth, home mortgage loans, and s_____ loans will not raise the threat to an unacceptable level if certain safeguards are all in place:
Loans, Leases, and Guarantees
Unsecured loans that are not material to the CPA’s net worth, home mortgage loans, and secured loans will not raise the threat to an unacceptable level if certain safeguards are all in place:
Unsecured loans that are not _______ to the CPA’s net worth, home mortgage loans, and secured loans will not raise the threat to an unacceptable level if certain safeguards are all in place:
Loans, Leases, and Guarantees
Unsecured loans that are not material to the CPA’s net worth, home mortgage loans, and secured loans will not raise the threat to an unacceptable level if certain safeguards are all in place:
Unsecured loans that are not material to the CPA’s net worth, home mortgage loans, and secured loans will not raise the threat to an unacceptable level if certain s______s are all in place:
Loans, Leases, and Guarantees
Unsecured loans that are not material to the CPA’s net worth, home mortgage loans, and secured loans will not raise the threat to an unacceptable level if certain safeguards are all in place:
Unsecured loans that are not material to the CPA’s net worth, ____ mortgage loans, and secured loans will not raise the threat to an unacceptable level if certain safeguards are all in place:
Loans, Leases, and Guarantees
Unsecured loans that are not material to the CPA’s net worth, home mortgage loans, and secured loans will not raise the threat to an unacceptable level if certain safeguards are all in place:
Loans to or from an attest client, an officer or director of an attest client, or an individual owning 10% or more of an attest client’s outstanding ownership interests create a self-interest _____ that may not be at an acceptable level.
Unsecured loans that are not material to the CPA’s net worth, home mortgage loans, and secured loans will not raise the _____ to an unacceptable level if certain safeguards are all in place:
Loans, Leases, and Guarantees
Loans to or from an attest client, an officer or director of an attest client, or an individual owning 10% or more of an attest client’s outstanding ownership interests create a self-interest threat that may not be at an acceptable level.
Unsecured loans that are not material to the CPA’s net worth, home mortgage loans, and secured loans will not raise the threat to an unacceptable level if certain safeguards are all in place:
Unsecured loans that are not material to the CPA’s net worth, home mortgage loans, and secured loans will not raise the threat to an unacceptable level if certain safeguards are all in place:
• The loan was obtained under the institutions ______ terms, procedures, and requirements.
Loans, Leases, and Guarantees
• The loan was obtained under the institutions normal terms, procedures, and requirements.
Unsecured loans that are not material to the CPA’s net worth, home mortgage loans, and secured loans will not raise the threat to an unacceptable level if certain safeguards are all in place:
• The loan was obtained ____ to the institution becoming an attest client;
from a lender that was not an attest client but was subsequently sold to an attest client;
or ____to the CPA becoming a covered member.
Loans, Leases, and Guarantees
• The loan was obtained prior to the institution becoming an attest client;
from a lender that was not an attest client but was subsequently sold to an attest client;
or prior to the CPA becoming a covered member.
Unsecured loans that are not material to the CPA’s net worth, home mortgage loans, and secured loans will not raise the threat to an unacceptable level if certain safeguards are all in place:
• The loan has been maintained as c______ at all times as long as the borrower has been a covered member and there have been no changes to the terms of the loan not provided for in the original agreement.
Loans, Leases, and Guarantees
• The loan has been maintained as current at all times as long as the borrower has been a covered member and there have been no changes to the terms of the loan not provided for in the original agreement.
Unsecured loans that are not material to the CPA’s net worth, home mortgage loans, and secured loans will not raise the threat to an unacceptable level if certain safeguards are all in place:
• The loan has been maintained as current at all times as long as the borrower has been a ______ member and there have been no changes to the terms of the loan not provided for in the original agreement.
Loans, Leases, and Guarantees
• The loan has been maintained as current at all times as long as the borrower has been a covered member and there have been no changes to the terms of the loan not provided for in the original agreement.
Unsecured loans that are not material to the CPA’s net worth, home mortgage loans, and secured loans will not raise the threat to an unacceptable level if certain safeguards are all in place:
• The estimated value of collateral at least equals the outstanding balance of the home mortgage or s_____ loan.
Loans, Leases, and Guarantees
• The estimated value of collateral at least equals the outstanding balance of the home mortgage or secured loan.
Unsecured loans that are not material to the CPA’s n__ _____, home mortgage loans, and secured loans will not raise the threat to an unacceptable level if certain safeguards are all in place:
Loans, Leases, and Guarantees
Unsecured loans that are not material to the CPA’s net worth, home mortgage loans, and secured loans will not raise the threat to an unacceptable level if certain safeguards are all in place:
Obtaining one of the following from a lending institution under its n____ lending procedures, terms, and requirements would not impair a CPA’s independence as long as the CPA is in compliance with the terms of the agreement at all times:
- Automobile loans
- Loans fully collateralized
- Credit cards less than $10,000
Loans, Leases, and Guarantees
Obtaining one of the following from a lending institution under its normal lending procedures, terms, and requirements would not impair a CPA’s independence as long as the CPA is in compliance with the terms of the agreement at all times:
- Automobile loans or leases collateralized by the automobile;
- Loans fully collateralized by the cash surrender value of an insurance policy or cash deposits at the same institution; or
- Credit cards and overdraft protection with an aggregate balance of no more than $10,000 after payment of the most recent monthly statement, made within the grace period.
Obtaining one of the following from a lending institution under its normal lending procedures, terms, and requirements would not impair a CPA’s independence as long as the CPA is in compliance with the terms of the agreement at all times:
- Automobile loans
- Loans fully collateralized
- Credit cards less than $_________
Loans, Leases, and Guarantees
- Automobile loans
- Loans fully collateralized
- Credit cards less than $10,000
Obtaining one of the following from a lending institution under its normal lending procedures, terms, and requirements would not impair a CPA’s independence as long as the CPA is in compliance with the terms of the agreement at all times:
• Automobile loans or leases c__________ by the automobile;
Loans, Leases, and GuaranteesLoans, Leases, and Guarantees
• Automobile loans or leases collateralized by the automobile;
Obtaining one of the following from a lending institution under its normal lending procedures, terms, and requirements would not impair a CPA’s independence as long as the CPA is in compliance with the terms of the agreement at all times:
• Loans fully c________ by the cash surrender value of an insurance policy or cash deposits at the same institution;
Loans, Leases, and GuaranteesLoans, Leases, and Guarantees
• Loans fully collateralized by the cash surrender value of an insurance policy or cash deposits at the same institution; or
Obtaining one of the following from a lending institution under its normal lending procedures, terms, and requirements would not impair a CPA’s independence as long as the CPA is in compliance with the terms of the agreement at all times:
• Credit cards and o_______ protection with an aggregate balance of no more than $10,000 after payment of the most recent monthly statement, made within the grace period.
• Credit cards and overdraft protection with an aggregate balance of no more than $10,000 after payment of the most recent monthly statement, made within the grace period.
A lease arrangement with an attest client would not raise threats to an unacceptable level if all of the following safeguards are in place:
• The lease meets the criteria to be accounted for as an o______ lease under GAAP
Loans, Leases, and Guarantees
• The lease meets the criteria to be accounted for as an operating lease under GAAP
A lease arrangement with an attest client would not raise threats to an unacceptable level if all of the following safeguards are in place:
• All p________s are made in accordance with the lease terms.
Loans, Leases, and Guarantees
• All payments are made in accordance with the lease terms.
A lease arrangement with an attest client would not raise threats to an unacceptable level if all of the following safeguards are in place:
• The terms and conditions are comparable to other similar _______
Loans, Leases, and Guarantees
• The terms and conditions are comparable to other similar leases
A lease arrangement with an attest client would not raise threats to an _________ level if all of the following safeguards are in place:
- The lease meets the criteria to be accounted for as an operating lease under GAAP;
- The terms and conditions are comparable to other similar leases; and
- All payments are made in accordance with the lease terms.
Loans, Leases, and Guarantees
A lease arrangement with an attest client would not raise threats to an unacceptable level if all of the following safeguards are in place:
- The lease meets the criteria to be accounted for as an operating lease under GAAP;
- The terms and conditions are comparable to other similar leases; and
- All payments are made in accordance with the lease terms.
Members of a CPA’s immediate family and all dependents are required to comply with the _________ rules to avoid impairing the __________ of the CPA.
Family Relationships with Attest Clients
Members of a CPA’s immediate family and all dependents are required to comply with the independence rules to avoid impairing the independence of the CPA.
In general, members of a CPA’s immediate family, which include the CPA’s spouse or spousal equivalent,
and all d__________s, whether related or not,
are required to comply with the independence rules to avoid impairing the independence of the CPA.
Family Relationships with Attest Clients
In general, members of a CPA’s immediate family, which include the CPA’s spouse or spousal equivalent,
and all dependents, whether related or not,
are required to comply with the independence rules to avoid impairing the independence of the CPA.
Without impairing a CPA’s independence, an immediate family member may:
• Be employed by an attest client provided it is NOT in a ___ position, which would create the threats of management participation, familiarity, and self-interest.
Family Relationships with Attest Clients
Any financial interests of immediate family members are attributed to the CPA, including when determining the materiality of an indirect financial interest.
Without impairing a CPA’s independence, an immediate family member may:
• Be employed by an attest client provided it is NOT in a key position, which would create the threats of management participation, familiarity, and self-interest.
