In Which of the Following Circumstances Would a CPA Who

question 32

Multiple Choice

In which of the following circumstances would a CPA who audits XZ Corporation lack independence?

• A) The CPA and XZ's president are both on the board of directors of COD Corporation.
• B) Both the CPA and XZ's president own 25 percent of FOB Corporation, a closely held company.
• C) The CPA has an automobile loan from XZ, a financial institution. The loan is collateralized by the automobile.
• D) The CPA reduced XZ's usual audit fee by 40 percent prior to the audit because XZ's financial condition was unfavorable.