Exam 4: Professional Ethics

Which of the following is a true statement regarding an action which the PCAOB can take if it finds a public accounting firm or an individual has violated the SEC rules governing the audit of a public company?

Which of the following would be considered a violation of the AICPA's Code of Professional Conduct?

In which of the following circumstances would a CPA be ethically bound to refrain from disclosing any confidential client information?

Auditors are allowed to have an indirect financial interest in an audit client, such as ownership of stock in a client's company by the auditor's brother, as long as the amount of the financial interest is immaterial to the brother.

Both SEC rules and the Sarbanes-Oxley Act prohibit auditors from providing bookkeeping services to their public company audit clients.

All owners of a CPA firm must be CPAs who are qualified to practice.

When determining whether independence is impaired because of an ownership interest in a client company, materiality will affect ownership

Which of the following is not defined as an act discreditable in either the Rules or the Interpretations of the AICPA's Code of Professional Conduct?

Under the interpretations to the AICPA Code, independence is considered to be impaired if fees remain unpaid for professional services provided more than six months before the date of the current year's report.

Which of the following instances would impair a CPA's independence when they have been retained as the auditor? I. A charitable organization where the CPA serves as treasurer II. A municipality where the CPA owns $250,000 of the $25 million outstanding bonds Of the municipality III. A company that the CPA's investment club owns a 10% investment interest

The Sarbanes-Oxley Act ________ a CPA firm from doing both bookkeeping and auditing services for the same public company client.

The Code of Professional Conduct is established by the membership of the AICPA, and the Interpretations of the Rules of Conduct are prepared by the

Under the Confidential Client Information rule, permission is not required from the client to use the audit documentation relating to that client during an AICPA authorized peer review program with another CPA firm.

Which of the following activities is allowed for a CPA firm's attestation clients?

Which of the following is not one of the major parts of the AICPA's Code of Professional Conduct?

A CPA firm may practice public accounting only in a form of organization permitted by federal law or regulation.

A CPA sole practitioner purchased stock in a client corporation and placed it in a trust as an educational fund for the CPA's minor child. The trust securities were not material to the CPA but were material to the child's personal net worth. Would the independence of the CPA be considered to be impaired with respect to the client?

Threats to compliance with the AICPA's Code of Professional Conduct fall into seven broad categories. List and explain three of these categories.

Ethical frameworks help identify the ethical issues and will always lead to the appropriate course of action.

The provisions of the Sarbanes-Oxley Act are most likely to allow which of the following non-audit services for audit clients?