Exam 4: Professional Ethics and Auditor Responsibilities

Susan Small CA has Medium Corporation as an audit client.Medium asked Small to create and install a new computerized payroll system.Because Small does not have the appropriate level of expertise, she referred Medium to Compusystems, Inc., a local software consulting company.Small has an arrangement with Compusytems wherein she is paid ten percent of any fee received by Compusystems from her referrals.Small has disclosed this to her client. Required: The situation above may involve a violation of one of the rules of professional conduct of the ICAO.State the rule in question and explain why or why not there is a violation of the rule.You need not refer to the rule number but should clearly describe the rule in question.

Which of the following items is the most important principle in the "fundamental statements of accepted conduct"?

According to the profession's rules of conduct, an auditor would be considered independent in which of the following instances?

Explain the difference among integrity, independence, and objectivity.

A client's management claims that they have to restrict an auditor's access to a research laboratory to protect the safety of the auditor.This could be an example of a lack of?

CA suspects that a Mega Corp., a tax client, has not reported all of its revenue for a federal income tax return.Furthermore, Mega does not give satisfactory answers when questioned by CA about its revenue sources.Nonetheless, CA signs the income tax return as the CA who has prepared it.Which rule of professional conduct has the CA violated?

If a professional accountant is convicted of a criminal offense or fraud, they are usually thrown out of the profession.

Which of the following philosophical principles in ethics places emphasis on the importance of following rules rather than on weighing the consequences of actions?

If a CA is expelled from their provincial institute, what does that mean in practical terms?

A succinct, but comprehensive definition of independence is that an auditor

Once a PA retires from a firm they are no longer required to maintain independence from former clients.

In which of the following situations would a PA still be considered independent?

Rules of professional conduct provide some direct solutions to specific, profession-related problems that may not be easily derived from general theories of ethics.

The interpretations related to the rules governing objectivity or independence allow

If a discipline committee requires a member to take continuing professional education, and the member fails to complete it in the required time, what is the likely further penalty?

What are the sanctions that can be imposed by the ICAO if a member is found guilty of violating one of the rules of professional conduct?

"Let your conscience be your guide" is an ethical principle which fits all situations.

Which of the following philosophical principles of ethics places emphasis on the consequences of action, rather than on following the rules?

The interpretation of the phrase "acts discreditable to the profession" would not include

In which of the following circumstances would a CA be in violation of the "Rules of Professional Conduct" in quoting a fee to a client?