Connor & Sullivan CPAs Has One Office

question 47

Multiple Choice

Connor & Sullivan CPAs has one office.Which of the following is least likely to impair independence with respect to an audit client?

• A)The client owes the firm for two prior years' audit fees.
• B)A partner in the CPA firm is the son of the president of the client.
• C)The husband of a partner in the firm has a small direct financial interest in the client.
• D)A partner in the firm has an investment in a mutual fund that has a direct interest in the client.

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Definitions:

Drawer

In banking, the person who writes or creates a check. In the context of furniture, it is a sliding storage compartment.

Universal Defense

A defense that is valid against all holders of a negotiable instrument, including holders in due course (HDCs) and holders with the rights of HDCs. Universal defenses are also called real defenses.

Personal Defense

Legal defenses that a defendant may use in a court of law to challenge the validity of a claim based on personal circumstances or conditions.

Agency Status

The condition of being an agent who is legally authorized to act on behalf of another person or entity, often subjected to specific responsibilities and liabilities.