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5 December, 12:14

A CPA sole practitioner purchased stock in a client corporation and placed it in a trust as an educational fund for the CPA's minor child. The trust securities were not material to the CPA but were material to the child's personal net worth. Would the independence of the CPA be considered to be impaired with respect to the client?

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  1. 5 December, 12:24
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    Would the independence of the CPA be considered to be impaired with respect to the client?

    Yes,

    Explanation:

    The stock would be considered a direct financial interest and consequently materiality is not a factor.
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