Family Relationships

Question 1

What are the two categories of family relationships?

Answer 1

1) Immediate family members: Spouse, spouse equivalents, and depends
2) Close Relatives- Parents, siblings, and non-depdent children

Question 2

What are the rules for immediate family members for employment?

Answer 2

Rules: They must follow the same rules as CMs

Immediately family members cannot own cumulatively more than 5% of an attest client

Employment rules: Can work for an attest client but they cannot work in a KEY POSITION includes:

• Primary accounting functions
• Primary responsibility for F/S
• Exercise influence over the F/S
• BOD, CEO, president, CFO, COO, CAO, controller, director of Financial, treasurer

Question 3

What are the rules for immediately family members who participate in an employee benefit plan that is an attest client?

Answer 3

allowed if:

1) The plan needs to be offered to all employment positions
2) Should not serve is a position of control over the benefit plan
3) Should not have ability to supervise or selection of investment options

Question 4

What are t he rules for immediate family members who participate in an employment benefit plan with financial interest in an attest client:

Answer 4

1) The CM is neither on the attest team nor a PTI
2) All employees are treated the same
3) if the plan creates an option that would allow the IMF to invest in a non attest client, they should get rid of client shares

Question 5

What are the rules for close relatives for employment?

Answer 5

Independence is impaired if:

1) A key position with an attest client
2) A financial interest in the attest client that:
- knows or has reason to know that was material to the close relative
- Enable the close relative to exercise significant influence over the attest client