QUESTIONIs it acceptable to stop the cement board 1/4" above tub flange,caulk the joint between cement board and tub flange and run the tile over the tub flange?
ANSWERANSWER - No there should not be a gap between the top of the bathtub flange and the backer board on the wall.
There should be a moisture barrier behind the backer board that is installed in a weather lapping manner starting at the tub flange working up the wall. The asphalt paper or polyethylene should overlap the tub flange so moisture that collects on the moisture barrier can evacuate into the tub; or more important so it can't get into the wall cavity.
The backer board should overlap the tub flange so the tile has a stable backing to attach to. This requires shimming the backer board out from the studs so the wall is plumb. There should be a 1/4" gap between the tub ledge and the backer board. Technically, after the tile is installed over the backer board that gap between it and the tub ledge should be filled with an ASTM C920 sealant (caulking e.g. silicone). Although some say you should have weep holes along this gap so any water behind can weep out into the tub. Others say there should be enough water to need weeping and it can evaporate through the grout joints, which is where it enters.
I always apply a liquid applied waterproof membrane over the backer board and bond the tile to it, so you keep the water out of the backer board. Or use a backer board that doesn't absorb.