A CPA Recently Inherited $400,000 of Stock Outstanding in One

question 27

Multiple Choice

A CPA recently inherited $400,000 of stock outstanding in one of her audit clients.In an attempt to maintain her independence,she placed her holdings of this audit client's stock into a trust.The trust is managed by a well-known independent trustee,JP Bankers Trust Services.The CPA's two young children are the sole beneficiaries of this trust.The CPA:

• A) Successfully has maintained her independence because none of the trust's assets directly benefit her
• B) Successfully has maintained her independence because she does not have control of these assets
• C) Has not maintained her independence because of the serious self-review threat presented
• D) Has not maintained her independence because she still is considered to have an interest in her audit client

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Definitions:

Oral Stage

A stage in Freud's psychosexual development theory, occurring in the first year of life, where pleasure is centered on oral activities such as feeding and sucking.

Reaction Formation

A defense mechanism where an individual acts in a manner opposite to their actual feelings or impulses.

Psychic Energy

A concept in psychoanalysis that refers to the force or influence behind human behaviors, emotions, and thoughts, often tied to unconscious processes.

Structural Theory

A theory in psychology and psychoanalysis that divides the psyche into three distinct parts (id, ego, and superego), each with its own roles and dynamics.