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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Definitions:

Medulla Oblongata

The medulla oblongata is the lower portion of the brainstem, controlling vital functions such as breathing, heart rate, and blood pressure.

Midbrain

A central part of the brainstem involved in vision, hearing, motor control, sleep/wake, arousal (alertness), and temperature regulation.

Cerebral Peduncles

Structures at the base of the brain, containing nerve tracts that connect the cerebrum with other parts of the brain and spinal cord.

Movement

The action or process of changing physical location or position or of having this changed, fundamental in all living organisms for functions ranging from locomotion to internal transport.