The Interpretations Related to the Rules Governing Objectivity or Independence

question 15

Multiple Choice

The interpretations related to the rules governing objectivity or independence allow ________.

• A) a public accountant (PA) to hold a material indirect interest in a client
• B) a PA to finance a home mortgage with a client if the mortgage is made under the client's normal lending procedures and terms
• C) a PA's spouse to hold a position as a director of a client's organization
• D) a PA to serve as a trustee of the pension fund of a client

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Definitions:

Coin Flip

A basic form of randomness used as a method for making a decision, characterized by an equal probability of landing on heads or tails.

Probability

An estimate of the probability that a specific event will take place.

Tails

The term used to refer to the rear or back end of an animal's body, or in coin flipping, the side of the coin not displaying the head.

Raffle

A means of raising money by selling numbered tickets, one or more of which are subsequently drawn at random, the holder or holders of such tickets winning a prize.