What is Loans with attest clients?
In short
A loan between a covered member and an attest client generally impairs independence, but certain loans from client financial institutions are allowed if made under normal lending terms.
Key takeaways
- Allowed loans include car loans, loans fully secured by cash deposits, and credit cards and overdrafts with total balances of $10,000 or less.
- Some home mortgages obtained before the member became a covered member are grandfathered.
- Loans to or from the client's officers or major owners are also restricted.
Where it's tested
AUD: Professional Ethics & Independence — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
A covered member obtains a loan from a bank that is an audit client, under the bank's normal lending terms. Which type of loan is permitted without impairing independence?