Family Relationships

Question 1

What is a “key position” that an immediate family member may not occupy with an attest client?

Answer 1

A position with: (1) primary responsibility for significant accounting functions that support the financial statement; (2) primary responsibility for preparing the financial statement; or (3) ability to exercise influence over contents of the financial statement (such as directors, C-level officers, director of internal audit, or similar positions)

Question 2

Under what conditions will a financial interest of a close relative of a team member impair independence?

Answer 2

If either the team member knows or has reason to know the financial interest is material to the close relative, or if the financial interest enables the close relative to exercise significant influence over the attest client.

Question 3

May a close relative of another partner in the office hold a key position with an attest client?

Answer 3

No.

Question 4

Which type of covered member has no restrictions on close relatives?

Answer 4

10-hour people

Question 5

Immediate family members cumulatively may not own more than what percentage of an attest client?

Answer 5

5%

Question 6

Name three “immediate family members.”

Answer 6

Spouses, spousal equivalents, and dependents

Question 7

Name three “close relatives.”

Answer 7

Parents, siblings, and nondependent children