Question 1

In determining the scope and nature of services to be performed in public practice,a CPA firm should:

Accepted Answer

A) Require independence for all services performed. 
B) Determine that the performance of all services is consistent with the firm's members' role as professionals. 
C) Have in place internal control procedures. 
D) Only perform accounting related services. 
A) Require independence for all services performed. 
B) Determine that the performance of all services is consistent with the firm's members' role as professionals. 
C) Have in place internal control procedures. 
D) Only perform accounting related services.

Question 2

The AICPA's Code of Professional Conduct includes principles,rules and interpretations.
a.Describe the purpose of each of the three parts.
b.Describe the disciplinary action that may be taken against a member who violates the Code.
c.Must the Rules be followed by members of the AICPA that are not in public practice? Explain your answer.

Accepted Answer

a.Principles provide an overall ethical

Question 3

Which of the following forms of advertising would most likely be considered a violation of the AICPA Code of Professional Conduct?

Accepted Answer

A) Advertising including the types of services offered and the standard fees for the services. 
B) Advertising including the experience of the firm's professional staff. 
C) Advertising including an indication that the firm has a close relationship with several tax court judges. 
D) Advertising including the percentage of the firm's staff that have CPA certificates. 
A) Advertising including the types of services offered and the standard fees for the services. 
B) Advertising including the experience of the firm's professional staff. 
C) Advertising including an indication that the firm has a close relationship with several tax court judges. 
D) Advertising including the percentage of the firm's staff that have CPA certificates.

Question 4

Immaterial financial interests of a CPA's nondependent children impair the CPA's independence.

Accepted Answer

A) True 
 B)False

Question 5

A CPA's retention of client records as a means of enforcing payment of an overdue audit fee is an action that is:

Accepted Answer

A) Considered acceptable by the AICPA Code of Professional Conduct. 
B) Ill advised since it would impair the CPA's independence with respect to the client. 
C) Considered discreditable to the profession. 
D) A violation of generally accepted auditing standards. 
A) Considered acceptable by the AICPA Code of Professional Conduct. 
B) Ill advised since it would impair the CPA's independence with respect to the client. 
C) Considered discreditable to the profession. 
D) A violation of generally accepted auditing standards.

Question 6

Which of the following is not a safeguard that is ordinarily considered in evaluating threats to auditor independence?

Accepted Answer

A) Safeguards created by the Audit Committee Reference Group. 
B) Safeguards created by the profession,legislation,or regulation. 
C) Safeguards implemented by the attest client. 
D) Safeguards implemented by the CPA firm. 
A) Safeguards created by the Audit Committee Reference Group. 
B) Safeguards created by the profession,legislation,or regulation. 
C) Safeguards implemented by the attest client. 
D) Safeguards implemented by the CPA firm.

Question 7

AICPA independence requirements suggest that a CPA should evaluate whether a particular threat to independence would lead a reasonable person,aware of all the relevant facts,to conclude that:

Accepted Answer

A) A questioning mind reveals doubt as to independence. 
B) An unacceptable risk of non-independence exists. 
C) The accountant is definitely not independent. 
D) There is substantial cause for a legal finding of non-independence. 
A) A questioning mind reveals doubt as to independence. 
B) An unacceptable risk of non-independence exists. 
C) The accountant is definitely not independent. 
D) There is substantial cause for a legal finding of non-independence.

Question 8

The Sarbanes-Oxley Act of 2002 placed significant restrictions on the types of consulting that may be performed by auditors for their public company audit clients.
a.List four types of services that are prohibited by the Act.
b.List three types of general consulting activities that would impair the auditors' independence based on the AICPA Code of Professional Conduct.

Accepted Answer

a.Services prohibited by the Act include

Question 9

An audit independence issue might be raised by the auditor's participation in consulting services engagements.Which of the following statements is most consistent with the profession's attitude toward this issue?

Accepted Answer

A) Information obtained as a result of a consulting services engagement is confidential to that specific engagement and should not influence performance of the attest function. 
B) The decision as to loss of independence must be made by the client based on the facts of the particular case. 
C) The auditor should not make management decisions for an audit client. 
D) The auditor who is asked to review management decisions,is also competent to make these decisions and can do so without loss of independence. 
A) Information obtained as a result of a consulting services engagement is confidential to that specific engagement and should not influence performance of the attest function. 
B) The decision as to loss of independence must be made by the client based on the facts of the particular case. 
C) The auditor should not make management decisions for an audit client. 
D) The auditor who is asked to review management decisions,is also competent to make these decisions and can do so without loss of independence.

Question 10

Which of the following is not a broad category of threat to auditor independence?

Accepted Answer

A) Familiarity. 
B) Positive work relationship. 
C) Financial self interest. 
D) Undue Influence. 
A) Familiarity. 
B) Positive work relationship. 
C) Financial self interest. 
D) Undue Influence.

Question 11

As compared to the AICPA Code of Professional Conduct,IFAC's International Code of Ethics for Professional Accountants:

Accepted Answer

A) Applies to more types of services. 
B) Has more specific restrictions. 
C) Has different rules regarding independence. 
D) Uses a conceptual approach. 
A) Applies to more types of services. 
B) Has more specific restrictions. 
C) Has different rules regarding independence. 
D) Uses a conceptual approach.

Question 12

Which of the following family relationships is most likely to impair a CPA's independence with respect to a particular audit client on which the CPA works as a "covered member"?

Accepted Answer

A) A close relative has a material investment in that client of which the CPA is not aware. 
B) A cousin has an immaterial investment in the client of which the CPA is aware. 
C) The CPA's sister is controller of the audit client. 
D) The CPA's spouse participates in a savings plan sponsored by the client. 
A) A close relative has a material investment in that client of which the CPA is not aware. 
B) A cousin has an immaterial investment in the client of which the CPA is aware. 
C) The CPA's sister is controller of the audit client. 
D) The CPA's spouse participates in a savings plan sponsored by the client.

Question 13

Which of the following statements is correct?

Accepted Answer

A) Client prepared records (e.g. ,the general ledger)may be retained by the CPA until fees due to the CPA are received. 
B) CPA working papers are the joint property of the CPA and the client. 
C) Working papers prepared by the auditor solely for the engagement need not be returned to the client. 
D) CPA working papers that include copies of client's records are not available to third parties under any circumstances. 
A) Client prepared records (e.g. ,the general ledger)may be retained by the CPA until fees due to the CPA are received. 
B) CPA working papers are the joint property of the CPA and the client. 
C) Working papers prepared by the auditor solely for the engagement need not be returned to the client. 
D) CPA working papers that include copies of client's records are not available to third parties under any circumstances.

Question 14

Which of the following is an authoritative body that the AICPA Code of Professional Conduct authorizes to promulgate auditing and attestation standards?

Accepted Answer

A) Auditing Standards Commission. 
B) Financial Accounting Standards Board. 
C) International Accounting Standards Board. 
D) Public Company Accounting Oversight Board. 
A) Auditing Standards Commission. 
B) Financial Accounting Standards Board. 
C) International Accounting Standards Board. 
D) Public Company Accounting Oversight Board.

Question 15

Which of the following statements is true with respect to the PCAOB and SEC's concept of independence when an auditor both prepares financial statements and audits those financial statements for a client?

Accepted Answer

A) The auditor is not independent. 
B) The auditor is independent if he or she is able to maintain a level of professional detachment. 
C) The auditor can audit the financial statements only if the audit process does not culminate in the expression of an opinion on the financial statements. 
D) The auditor cannot audit the financial statements since a lack of integrity exists. 
A) The auditor is not independent. 
B) The auditor is independent if he or she is able to maintain a level of professional detachment. 
C) The auditor can audit the financial statements only if the audit process does not culminate in the expression of an opinion on the financial statements. 
D) The auditor cannot audit the financial statements since a lack of integrity exists.

Question 16

The Code of Ethics for internal auditors

Accepted Answer

A) Applies both to individuals and entities that provide internal auditing services. 
B) Applies primarily to internal auditor support of the external audit function. 
C) Requires independence from an internal auditor's employer. 
D) Is enforced for public companies by the Internal Audit Division of the PCAOB. 
A) Applies both to individuals and entities that provide internal auditing services. 
B) Applies primarily to internal auditor support of the external audit function. 
C) Requires independence from an internal auditor's employer. 
D) Is enforced for public companies by the Internal Audit Division of the PCAOB.

In determining the scope and nature of services to be performed in public practice,a CPA firm should:

Which of the following forms of advertising would most likely be considered a violation of the AICPA Code of Professional Conduct?

Immaterial financial interests of a CPA's nondependent children impair the CPA's independence.

A CPA's retention of client records as a means of enforcing payment of an overdue audit fee is an action that is:

Which of the following is not a safeguard that is ordinarily considered in evaluating threats to auditor independence?

AICPA independence requirements suggest that a CPA should evaluate whether a particular threat to independence would lead a reasonable person,aware of all the relevant facts,to conclude that:

An audit independence issue might be raised by the auditor's participation in consulting services engagements.Which of the following statements is most consistent with the profession's attitude toward this issue?

Which of the following is not a broad category of threat to auditor independence?

As compared to the AICPA Code of Professional Conduct,IFAC's International Code of Ethics for Professional Accountants:

Which of the following family relationships is most likely to impair a CPA's independence with respect to a particular audit client on which the CPA works as a "covered member"?

Which of the following statements is correct?

Which of the following is an authoritative body that the AICPA Code of Professional Conduct authorizes to promulgate auditing and attestation standards?

Which of the following statements is true with respect to the PCAOB and SEC's concept of independence when an auditor both prepares financial statements and audits those financial statements for a client?

The Code of Ethics for internal auditors

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

In determining the scope and nature of services to be performed in public practice,a CPA firm should:

Which of the following forms of advertising would most likely be considered a violation of the AICPA Code of Professional Conduct?

Immaterial financial interests of a CPA's nondependent children impair the CPA's independence.

A CPA's retention of client records as a means of enforcing payment of an overdue audit fee is an action that is:

Which of the following is not a safeguard that is ordinarily considered in evaluating threats to auditor independence?

AICPA independence requirements suggest that a CPA should evaluate whether a particular threat to independence would lead a reasonable person,aware of all the relevant facts,to conclude that:

An audit independence issue might be raised by the auditor's participation in consulting services engagements.Which of the following statements is most consistent with the profession's attitude toward this issue?

Which of the following is not a broad category of threat to auditor independence?

As compared to the AICPA Code of Professional Conduct,IFAC's International Code of Ethics for Professional Accountants:

Which of the following family relationships is most likely to impair a CPA's independence with respect to a particular audit client on which the CPA works as a "covered member"?

Which of the following statements is correct?

Which of the following is an authoritative body that the AICPA Code of Professional Conduct authorizes to promulgate auditing and attestation standards?

Which of the following statements is true with respect to the PCAOB and SEC's concept of independence when an auditor both prepares financial statements and audits those financial statements for a client?

The Code of Ethics for internal auditors

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