Question

The adverse interest threat refers to situations in which the

a) CPA and the client have a friendly relationship
b) CPA has a financial interest in the client's success
c) Interests of the client and CPA are in conflict
d) Client is not satisfied with the CPA's services

Answer 1

The adverse interest threat refers to situations in which the interests of the client and CPA are in conflict.

Step-by-step explanation:

The adverse interest threat refers to situations in which the interests of the client and CPA are in conflict. This means that the CPA may have motives or incentives that go against the best interests of the client. For example, if a CPA receives a commission for recommending certain financial products to a client, there is a conflict of interest because their recommendation may not be in the client's best interest but rather their own financial gain.