Which of the Following Situations of a CPA's Distant Relatives

question 1

Multiple Choice

Which of the following situations of a CPA's distant relatives does not impair the CPA's independence?

• A) CPA's parent holds a key position with an audit client.
• B) CPA's nephew is starting as a salesperson with an audit client.
• C) CPA's dependent roommate owns a material interest, and sits on the board, of an audit client.
• D) CPA's sister is chief counsel for an audit client.

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Definitions:

Geographic Areas

Refers to specific locations or regions in which a company operates, often used for segment reporting or analyzing market performance.

Operating Segments

Components of a business that engage in distinct economic activities, generating revenues and incurring expenses, whose results are reviewed regularly by the entity’s decision-makers.

Consolidated External Revenues

The total revenue generated by a parent company and its subsidiaries, excluding transactions among them, reported in the consolidated financial statements.

Asset Test

A measure used to evaluate whether an entity has enough liquid assets to cover its short-term liabilities, indicating financial stability.