A CPA's Financial Interests in Nonclients May Have an Effect

question 129

Multiple Choice

A CPA's financial interests in nonclients may have an effect on independence if the nonclients are investors in or investees of the client. Which situation would not impair a CPA's independence?

• A) The client has an immaterial investment in a nonclient investee in which the CPA has an immaterial investment.
• B) The CPA has a material indirect financial interest in a nonclient in which the client has a material investment.
• C) The client investor has a nonmaterial investment in the nonclient investee in which the CPA has a material investment.
• D) The CPA has a joint closely held investment with the client in a nonclient that is material to the client as well as the CPA.

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