Depository Accounts, Brokerage Accounts, and Insurance Policies

Question 1

What are the rules for depository accountants and independence issues?

Answer 1

Firms may maintain depository accounts at a bank that is an attest client IF they conclude that the likelihood is remote that the bank will experience financial difficulties

Individuals: Individual CM may maintain accounts if:

1) The balance is fully insured
2) Any uninsured amounts are not material to the covered member’s worth
3) If uninsured accounts are material, they are reduced to an immaterial amount w/in 30 days

Question 2

What are the rules for brokerage accounts and independence issues?

Answer 2

CM brokerage account at an attest client broker-dealer would impair independence unless:

• The attest client’s services were rendered under the attest client’s normal terms, procedures and requirements
• Any covered member’s assets subject to the risk of loss are immaterial to the covered members worth (might lose your money because the firm went bankrupt, not changes in the stock market)

Question 3

What are the rules for insurance firms and independence rules?

Answer 3

Most insurance policies don’t have investment interest and there is no issues.

If there is an investment option, there would not be an issue because you don’t have any control over those decisions. If you have the power to make decisions, then you an issue