Question 1

Enforcement of the Rules of the AICPA Code of Professional Conduct rests with three groups.

Accepted Answer

A) True 
 B)False  False

Question 2

The Rules of Conduct consist of 15 enforceable rules.

Accepted Answer

A) True 
 B)False  False

Question 3

Which of the following ethical principles is at the center of the profession's ongoing quest for excellence in the performance of professional services?

Accepted Answer

A)  Responsibilities. 
B)  The Public Interest. 
C)  Integrity. 
D)  Objectivity and Independence. 
E)  Due Care. 
A)  Responsibilities. 
B)  The Public Interest. 
C)  Integrity. 
D)  Objectivity and Independence. 
E)  Due Care. E

Question 4

Under the automatic disciplinary provisions of the bylaws, membership in the AICPA is terminated without a hearing if a member's CPA certificate is revoked as a disciplinary measure by any governmental agency.

Accepted Answer

A) True 
 B)False

Question 5

Which one of the following Principles relates to being impartial and unbiased in all matters pertaining to an engagement?

Accepted Answer

A)  Responsibilities 
B)  Objectivity and Independence 
C)  The Public Interest 
D)  Scope and Nature of Services 
E)  Due Care 
A)  Responsibilities 
B)  Objectivity and Independence 
C)  The Public Interest 
D)  Scope and Nature of Services 
E)  Due Care

Question 6

Rule 203 applies to accounting principles:

Accepted Answer

A)  promulgated by bodies designated by AICPA Council. 
B)  promulgated by the FASB. 
C)  promulgated by the GASB. 
D)  within the current body of GAAP. 
E)  deemed to apply in the circumstances. 
A)  promulgated by bodies designated by AICPA Council. 
B)  promulgated by the FASB. 
C)  promulgated by the GASB. 
D)  within the current body of GAAP. 
E)  deemed to apply in the circumstances.

Question 7

There is a single joint trial board consisting of at least thirty-six AICPA members elected by Council from present or former Council members.

Accepted Answer

A) True 
 B)False

Question 8

It is fundamental that a CPA in public practice hold in strict confidence:

Accepted Answer

A)  all material financial information. 
B)  balance sheet information. 
C)  all information about a client's affairs. 
D)  all financial information. 
E)  current year information. 
A)  all material financial information. 
B)  balance sheet information. 
C)  all information about a client's affairs. 
D)  all financial information. 
E)  current year information.

Question 9

The unpaid fees ruling does not apply to fees outstanding from a client in bankruptcy.

Accepted Answer

A) True 
 B)False

Question 10

Which one of the following is an incorrect quote from Rule 102?

Accepted Answer

A)  "in the performance of any professional service . . ." 
B)  "and integrity, shall be free of conflicts of interest, and . . ." 
C)  "shall not knowingly misrepresent facts . . ." 
D)  "an auditor shall maintain independence . . ." 
E)  "shall not knowingly. . . subordinate his or her judgment to others. . ." 
A)  "in the performance of any professional service . . ." 
B)  "and integrity, shall be free of conflicts of interest, and . . ." 
C)  "shall not knowingly misrepresent facts . . ." 
D)  "an auditor shall maintain independence . . ." 
E)  "shall not knowingly. . . subordinate his or her judgment to others. . ."

Question 11

The Joint Trial Board consists of at least how many members?

Accepted Answer

A)  50 
B)  20 
C)  40 
D)  36 
E)  43 
A)  50 
B)  20 
C)  40 
D)  36 
E)  43

Question 12

The two main sections of the AICPA's Code of Professional Conduct are:

Accepted Answer

A)  Principles and Rules of Conduct. 
B)  Rules of Conduct and Interpretations of the Rules of Conduct. 
C)  Principles and Ethics Rulings. 
D)  Interpretations of the Rules of Conduct and Ethics Rulings. 
E)  Principles and Interpretations of the Rules of Conduct. 
A)  Principles and Rules of Conduct. 
B)  Rules of Conduct and Interpretations of the Rules of Conduct. 
C)  Principles and Ethics Rulings. 
D)  Interpretations of the Rules of Conduct and Ethics Rulings. 
E)  Principles and Interpretations of the Rules of Conduct.

Question 13

An immediate family member of a covered member does not include a parent to the covered member.

Accepted Answer

A) True 
 B)False

Question 14

A direct or material indirect financial interest in the client would impair independence if the interest were held during which of the following time periods?

Accepted Answer

A)  at the time of issuing the opinion 
B)  from the statement date to the time of issuing the opinion 
C)  from the beginning of the period covered by the statements to the time of issuing the opinion 
D)  during the engagement up to the date that auditing field work is completed 
E)  during the engagement or at the time of issuing the opinion 
A)  at the time of issuing the opinion 
B)  from the statement date to the time of issuing the opinion 
C)  from the beginning of the period covered by the statements to the time of issuing the opinion 
D)  during the engagement up to the date that auditing field work is completed 
E)  during the engagement or at the time of issuing the opinion

Question 15

Which one of the following Principles applies only to an individual who renders service to the public?

Accepted Answer

A)  Responsibilities 
B)  Objectivity and Independence 
C)  The Public Interest 
D)  Scope and Nature of Services 
E)  Due Care 
A)  Responsibilities 
B)  Objectivity and Independence 
C)  The Public Interest 
D)  Scope and Nature of Services 
E)  Due Care

Question 16

The Due Care Principle in the AICPA's Code of Professional Conduct does not require of the auditor:

Accepted Answer

A)  freedom from errors in judgment. 
B)  thoroughness in their work. 
C)  completion of the service promptly. 
D)  observation of technical and ethical standards. 
E)  continual improvement in competence. 
A)  freedom from errors in judgment. 
B)  thoroughness in their work. 
C)  completion of the service promptly. 
D)  observation of technical and ethical standards. 
E)  continual improvement in competence.

Question 17

When disclosures in the financial statements are inadequate, Rule 301 prohibits the member from disclosing the required information in the report without the direct consent of the client.

Accepted Answer

A) True 
 B)False

Question 18

A firm may designate itself as "Members of the American Institute of Certified Public Accountants" if a majority of the partners or shareholders are members.

Accepted Answer

A) True 
 B)False

Question 19

In general, except when explicitly stated otherwise, the Rules of Conduct in the AICPA's Code of Professional Conduct are applicable to:

Accepted Answer

A)  all members. 
B)  all professional services. 
C)  all members in public practice. 
D)  all members in private practice. 
E)  all members and all professional services. 
A)  all members. 
B)  all professional services. 
C)  all members in public practice. 
D)  all members in private practice. 
E)  all members and all professional services.

Question 20

Currently, the technical standards that fall under Rule 202 ─ Compliance With Standards include those issued by the:

Accepted Answer

A)  Auditing Standards Board (AS
B) . 
B)  Accounting and Review Services Committee (ARS
C) . 
C)  Management Consulting Services Executive Committee (MCSE
C) . 
D)  ASB, ARSC, and MCSEC. 
E)  FASB, GASB and CASB. 
A)  Auditing Standards Board (AS
B) . 
B)  Accounting and Review Services Committee (ARS
C) . 
C)  Management Consulting Services Executive Committee (MCSE
C) . 
D)  ASB, ARSC, and MCSEC. 
E)  FASB, GASB and CASB.

Exam 3: Professional Ethics

Enforcement of the Rules of the AICPA Code of Professional Conduct rests with three groups.

The Rules of Conduct consist of 15 enforceable rules.

Which of the following ethical principles is at the center of the profession's ongoing quest for excellence in the performance of professional services?

Under the automatic disciplinary provisions of the bylaws, membership in the AICPA is terminated without a hearing if a member's CPA certificate is revoked as a disciplinary measure by any governmental agency.

Which one of the following Principles relates to being impartial and unbiased in all matters pertaining to an engagement?

Rule 203 applies to accounting principles:

There is a single joint trial board consisting of at least thirty-six AICPA members elected by Council from present or former Council members.

It is fundamental that a CPA in public practice hold in strict confidence:

The unpaid fees ruling does not apply to fees outstanding from a client in bankruptcy.

Which one of the following is an incorrect quote from Rule 102?

The Joint Trial Board consists of at least how many members?

The two main sections of the AICPA's Code of Professional Conduct are:

An immediate family member of a covered member does not include a parent to the covered member.

A direct or material indirect financial interest in the client would impair independence if the interest were held during which of the following time periods?

Which one of the following Principles applies only to an individual who renders service to the public?

The Due Care Principle in the AICPA's Code of Professional Conduct does not require of the auditor:

When disclosures in the financial statements are inadequate, Rule 301 prohibits the member from disclosing the required information in the report without the direct consent of the client.

A firm may designate itself as "Members of the American Institute of Certified Public Accountants" if a majority of the partners or shareholders are members.

In general, except when explicitly stated otherwise, the Rules of Conduct in the AICPA's Code of Professional Conduct are applicable to:

Currently, the technical standards that fall under Rule 202 ─ Compliance With Standards include those issued by the:

Auditing and the Public Accounting

Financial Statement Audits and

Auditors Legal Liability

Overview of the Audit Process

Audit Evidence, Audit Objectives,

Accepting the Engagement and

Materiality Decisions and Performing Analytical Procedures

Audit Risk, Including the Risk of Fraud

Understanding Internal Controls

Audit Procedures in Response to Assessed Risks: Tests of Controls

Audit Procedures in Response to Assessed Risks: Substantive Tests

Audit Sampling in Substantive Tests

Auditing the Revenue Cycle

Auditing the Expenditure Cycle

Auditing the Production and

Auditing the Investing and

Auditing Investments and

Completing the Audit and Postaudit

Attest and Assurance Services, and Related Reports

Internal, Operational, and

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