Question 1

Which of the following is least likely to be considered an act discreditable to the accounting profession?

Accepted Answer

A) Disclosing confidential client information. 
B) Failure to comply with federal laws regarding the filing of tax returns. 
C) Knowingly disclosing CPA exam questions. 
D) Refusing to provide the client with copies of working papers the client prepared for the auditor. 
A) Disclosing confidential client information. 
B) Failure to comply with federal laws regarding the filing of tax returns. 
C) Knowingly disclosing CPA exam questions. 
D) Refusing to provide the client with copies of working papers the client prepared for the auditor.

Question 2

Independence of a CPA with respect to a client is not impaired if:

Accepted Answer

A) The CPA has a loan to an officer of the client. 
B) The CPA has an immaterial direct interest in the client. 
C) The CPA is trustee for the client's pension plan. 
D) The CPA has an immaterial joint,closely held business investment with the client. 
A) The CPA has a loan to an officer of the client. 
B) The CPA has an immaterial direct interest in the client. 
C) The CPA is trustee for the client's pension plan. 
D) The CPA has an immaterial joint,closely held business investment with the client.

Question 3

When an accountant is not independent,the accountant is precluded from issuing a:

Accepted Answer

A) Compilation report. 
B) Review report. 
C) Management advisory report. 
D) Tax planning report. 
A) Compilation report. 
B) Review report. 
C) Management advisory report. 
D) Tax planning report.

Question 4

Which of the following organizations issue international ethics standards for auditors?

Accepted Answer

A) The AICPA. 
B) The IFAC. 
C) The SEC. 
D) The FASB. 
A) The AICPA. 
B) The IFAC. 
C) The SEC. 
D) The FASB.

Question 5

The AICPA Code of Professional Conduct states that a CPA shall not disclose any confidential information obtained in the course of a professional engagement except with the consent of the client.This rule should be understood to preclude a CPA from responding to an inquiry made by:

Accepted Answer

A) The trial board of the AICPA. 
B) An investigative body of a state CPA society. 
C) A CPA-shareholder of the client corporation. 
D) An AICPA voluntary quality review body. 
A) The trial board of the AICPA. 
B) An investigative body of a state CPA society. 
C) A CPA-shareholder of the client corporation. 
D) An AICPA voluntary quality review body.

Question 6

Statements on Accounting and Review Services are enforceable under the AICPA Code of Professional Conduct.

Accepted Answer

A) True 
 B)False

Question 7

Connor & Sullivan CPAs has one office.Which of the following is least likely to impair independence with respect to an audit client?

Accepted Answer

A) The client owes the firm for two prior years' audit fees. 
B) A partner in the CPA firm is the son of the president of the client. 
C) The husband of a partner in the firm has a small direct financial interest in the client. 
D) A partner in the firm has an investment in a mutual fund that has a direct interest in the client. 
A) The client owes the firm for two prior years' audit fees. 
B) A partner in the CPA firm is the son of the president of the client. 
C) The husband of a partner in the firm has a small direct financial interest in the client. 
D) A partner in the firm has an investment in a mutual fund that has a direct interest in the client.

Question 8

If the AICPA Code of Professional Conduct does not specifically address a threat to auditor independence,the auditor should:

Accepted Answer

A) Conclude that the threat is not significant unless proven so. 
B) Conclude that the threat results in a lack of independence unless it can be shown that no impairment of independence occurs. 
C) Consider the threat from the perspective of a reasonable and informed third party who has knowledge of all the relevant information. 
D) Consult the Statements on Auditing Standards for guidance. 
A) Conclude that the threat is not significant unless proven so. 
B) Conclude that the threat results in a lack of independence unless it can be shown that no impairment of independence occurs. 
C) Consider the threat from the perspective of a reasonable and informed third party who has knowledge of all the relevant information. 
D) Consult the Statements on Auditing Standards for guidance.

Question 9

Under the AICPA Code of Professional Conduct,which of the following rules isnot applicable to CPAs in business?

Accepted Answer

A) Integrity and objectivity. 
B) General standards. 
C) Independence. 
D) Acts discreditable. 
A) Integrity and objectivity. 
B) General standards. 
C) Independence. 
D) Acts discreditable.

Question 10

Jennifer Nelson,CPA,has posted the general ledger and has maintained the financial records of Quinn Corporation.As a part of his responsibilities he has recorded journal entries and made closing entries without consulting Quinn's management.Which of the following best summarize the AICPA and SEC views as to the following question: Is audit independence impaired? $$\begin{array} { l c c } 
\text { Item} & \text { AlCPA } & \text { SEC } \
\text { A } & \text { Yes } & \text { Yes } \
\text { B. } & \text { Yes } & \text { No } \
\text { C. } & \text { No } & \text { Yes } \
\text { D } & \text { No } & \text { No }
\end{array}$$

Accepted Answer

A) Option A 
B) Option B 
C) Option C 
D) Option D 
A) Option A 
B) Option B 
C) Option C 
D) Option D

Question 11

Which of the following forms of organization is most likely to protect the personal assets of any partner or shareholder who has not been involved on an engagement resulting in litigation?

Accepted Answer

A) Professional corporation. 
B) Limited liability partnership. 
C) Partnership. 
D) Subchapter M Incorporation. 
A) Professional corporation. 
B) Limited liability partnership. 
C) Partnership. 
D) Subchapter M Incorporation.

Question 12

The following is a list of circumstances that might be faced by a public accounting firm.Select the rule violated of the AICPA Code of Professional Conduct in the second column.If no rule is violated select "no violation" (this may be used once,more than once,or not at all).Rules may be used either once,or not at all.
-A CPA advertises in a local newspaper.

Accepted Answer

A) Acts discreditable. 
B) Accounting principles. 
C) Integrity and objectivity. 
D) Compliance with standards. 
E) Independence.
F)Contingent fees.
G)No violation. 
A) Acts discreditable. 
B) Accounting principles. 
C) Integrity and objectivity. 
D) Compliance with standards. 
E) Independence.
F)Contingent fees.
G)No violation.

Question 13

The Rules portion of the AICPA Code of Professional Conduct must be followed by only those members in private practice.

Accepted Answer

A) True 
 B)False

Question 14

An accounting association established a code of ethics for all members.The most likely primary purpose for establishing the code of ethics was to:

Accepted Answer

A) Outline criteria for professional behavior to maintain standards of competence,morality,honesty,and dignity within the association. 
B) Establish standards to follow for effective accounting practice. 
C) Provide a framework within which accounting policies could be effectively developed and executed. 
D) Outline criteria that can be utilized in conducting interviews of potential new accountants. 
A) Outline criteria for professional behavior to maintain standards of competence,morality,honesty,and dignity within the association. 
B) Establish standards to follow for effective accounting practice. 
C) Provide a framework within which accounting policies could be effectively developed and executed. 
D) Outline criteria that can be utilized in conducting interviews of potential new accountants.

Question 15

The rules in the AICPA Code of Professional Conduct are enforceable under the AICPA Bylaws.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following attributes is more closely associated with attestation services performed by a CPA firm than with other lines of professional work?

Accepted Answer

A) Integrity. 
B) Competence. 
C) Independence. 
D) Keeping informed on current professional developments. 
A) Integrity. 
B) Competence. 
C) Independence. 
D) Keeping informed on current professional developments.

Question 17

If a CPA violates the AICPA Code of Professional Conduct,the AICPA Trial Board may do all of the following,except:

Accepted Answer

A) Admonish the offending member. 
B) Suspend the offending member. 
C) Expel the offending member. 
D) Revoke the offending member's CPA certificate. 
A) Admonish the offending member. 
B) Suspend the offending member. 
C) Expel the offending member. 
D) Revoke the offending member's CPA certificate.

Question 18

The following is a list of circumstances that might be faced by a public accounting firm.Select the rule violated of the AICPA Code of Professional Conduct in the second column.If no rule is violated select "no violation" (this may be used once,more than once,or not at all).Rules may be used either once,or not at all.
-A CPA and the president of an audit client both have an immaterial joint investment in another company.The CPA firm provides no services for the other company.

Accepted Answer

A) Acts discreditable. 
B) Accounting principles. 
C) Integrity and objectivity. 
D) Compliance with standards. 
E) Independence.
F)Contingent fees.
G)No violation. 
A) Acts discreditable. 
B) Accounting principles. 
C) Integrity and objectivity. 
D) Compliance with standards. 
E) Independence.
F)Contingent fees.
G)No violation.

Question 19

The communications between CPAs and their clients are confidential,but not privileged under federal law.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following acts by a CPA would most likely be considered a violation of the AICPA Code of Professional Conduct?

Accepted Answer

A) Assisting a client in preparing a financial forecast. 
B) Forming a professional corporation to practice as a CPA. 
C) Accepting a fee in a tax matter relating to an administrative proceeding. 
D) A "covered member" owns an immaterial amount of stock in an audit client. 
A) Assisting a client in preparing a financial forecast. 
B) Forming a professional corporation to practice as a CPA. 
C) Accepting a fee in a tax matter relating to an administrative proceeding. 
D) A "covered member" owns an immaterial amount of stock in an audit client.

Which of the following is least likely to be considered an act discreditable to the accounting profession?

Independence of a CPA with respect to a client is not impaired if:

When an accountant is not independent,the accountant is precluded from issuing a:

Which of the following organizations issue international ethics standards for auditors?

The AICPA Code of Professional Conduct states that a CPA shall not disclose any confidential information obtained in the course of a professional engagement except with the consent of the client.This rule should be understood to preclude a CPA from responding to an inquiry made by:

Statements on Accounting and Review Services are enforceable under the AICPA Code of Professional Conduct.

Connor & Sullivan CPAs has one office.Which of the following is least likely to impair independence with respect to an audit client?

If the AICPA Code of Professional Conduct does not specifically address a threat to auditor independence,the auditor should:

Under the AICPA Code of Professional Conduct,which of the following rules isnot applicable to CPAs in business?

Which of the following forms of organization is most likely to protect the personal assets of any partner or shareholder who has not been involved on an engagement resulting in litigation?

The Rules portion of the AICPA Code of Professional Conduct must be followed by only those members in private practice.

An accounting association established a code of ethics for all members.The most likely primary purpose for establishing the code of ethics was to:

The rules in the AICPA Code of Professional Conduct are enforceable under the AICPA Bylaws.

Which of the following attributes is more closely associated with attestation services performed by a CPA firm than with other lines of professional work?

If a CPA violates the AICPA Code of Professional Conduct,the AICPA Trial Board may do all of the following,except:

The communications between CPAs and their clients are confidential,but not privileged under federal law.

Which of the following acts by a CPA would most likely be considered a violation of the AICPA Code of Professional Conduct?

The Role of the Public Accountant in the American Economy

Professional Standards

Legal Liability of Cpas

Audit Evidence and Documentation

Audit Planning, understanding the Client, assessing Risks, and Responding

Internal Control

Consideration of Internal Control in an Information Technology Environment

Audit Sampling

Cash and Financial Investments

Accounts Receivable, notes Receivable, and Revenue

Inventories and Cost of Goods Sold

Property,plant,and Equipment: Depreciation and Depletion

Accounts Payable and Other Liabilities

Debt and Equity Capital

Auditing Operations and Completing the Audit

Auditors Reports

Integrated Audits of Public Companies

Additional Assurance Services: Historical Financial Information

Additional Assurance Services: Other Information

Internal, operational, and Compliance Auditing

Filters

Exam 3: Professional Ethics

Which of the following is least likely to be considered an act discreditable to the accounting profession?

Independence of a CPA with respect to a client is not impaired if:

When an accountant is not independent,the accountant is precluded from issuing a:

Which of the following organizations issue international ethics standards for auditors?

The AICPA Code of Professional Conduct states that a CPA shall not disclose any confidential information obtained in the course of a professional engagement except with the consent of the client.This rule should be understood to preclude a CPA from responding to an inquiry made by:

Statements on Accounting and Review Services are enforceable under the AICPA Code of Professional Conduct.

Connor & Sullivan CPAs has one office.Which of the following is least likely to impair independence with respect to an audit client?

If the AICPA Code of Professional Conduct does not specifically address a threat to auditor independence,the auditor should:

Under the AICPA Code of Professional Conduct,which of the following rules isnot applicable to CPAs in business?

Which of the following forms of organization is most likely to protect the personal assets of any partner or shareholder who has not been involved on an engagement resulting in litigation?

The Rules portion of the AICPA Code of Professional Conduct must be followed by only those members in private practice.

An accounting association established a code of ethics for all members.The most likely primary purpose for establishing the code of ethics was to:

The rules in the AICPA Code of Professional Conduct are enforceable under the AICPA Bylaws.

Which of the following attributes is more closely associated with attestation services performed by a CPA firm than with other lines of professional work?

If a CPA violates the AICPA Code of Professional Conduct,the AICPA Trial Board may do all of the following,except:

The communications between CPAs and their clients are confidential,but not privileged under federal law.

Which of the following acts by a CPA would most likely be considered a violation of the AICPA Code of Professional Conduct?

The Role of the Public Accountant in the American Economy

Professional Standards

Legal Liability of Cpas

Audit Evidence and Documentation

Audit Planning, understanding the Client, assessing Risks, and Responding

Internal Control

Consideration of Internal Control in an Information Technology Environment

Audit Sampling

Cash and Financial Investments

Accounts Receivable, notes Receivable, and Revenue

Inventories and Cost of Goods Sold

Property,plant,and Equipment: Depreciation and Depletion

Accounts Payable and Other Liabilities

Debt and Equity Capital

Auditing Operations and Completing the Audit

Auditors Reports

Integrated Audits of Public Companies

Additional Assurance Services: Historical Financial Information

Additional Assurance Services: Other Information

Internal, operational, and Compliance Auditing

Filters