Question 1

Each of the following were themes of Congressional investigations of the accounting profession during the 1970s and 1980s except:

Accepted Answer

A) Whether low-balling to obtain audits impairs independence 
B) Whether nonaudit services impair auditor independence 
C) The need for a report on internal controls 
D) The importance of developing techniques to prevent and detect fraud 
A) Whether low-balling to obtain audits impairs independence 
B) Whether nonaudit services impair auditor independence 
C) The need for a report on internal controls 
D) The importance of developing techniques to prevent and detect fraud

Question 2

The insider trading case against Scott London focused on:

Accepted Answer

A) Providing confidential information about audit clients to a friend 
B) Personally buying stock of audit clients after receiving confidential information 
C) Providing confidential information about audit clients to his son 
D) Personally selling stock of audit clients after receiving confidential information 
A) Providing confidential information about audit clients to a friend 
B) Personally buying stock of audit clients after receiving confidential information 
C) Providing confidential information about audit clients to his son 
D) Personally selling stock of audit clients after receiving confidential information

Question 3

Jacob just joined the firm of Gordon & Towns LLC.Prior to beginning his first group audit assignment,Jacob asks to meet with his mentor,Isaac.He asks Isaac how making judgments in an audit team setting differs from running an audit oneself.What is the best advice for Isaac to give to Jacob?

Accepted Answer

A) They are not the same 
B) Groups are not prone to judgment traps and biases 
C) Groups are prone to making quick decisions in order to avoid conflict 
D) Good judgment principles apply only in group settings since other are involved 
A) They are not the same 
B) Groups are not prone to judgment traps and biases 
C) Groups are prone to making quick decisions in order to avoid conflict 
D) Good judgment principles apply only in group settings since other are involved

Question 4

The committee that first recommended that the profession institute a voluntary program for peer review was:

Accepted Answer

A) Metcalf committee 
B) Cohen committee 
C) The House Subcommittee on Oversight and Investigations 
D) Mintz and Morris committee 
A) Metcalf committee 
B) Cohen committee 
C) The House Subcommittee on Oversight and Investigations 
D) Mintz and Morris committee

Question 5

A CPA can accept a gift from a client as long as:

Accepted Answer

A) Adequate safeguards exist to prevent any threats to compliance with the Integrity and Objectivity rule 
B) Adequate internal controls exist in the client entity to ensure gifts are made without any pre-conditions 
C) The amount is below what is considered to be a material payment 
D) Audit services are not provided to the client 
A) Adequate safeguards exist to prevent any threats to compliance with the Integrity and Objectivity rule 
B) Adequate internal controls exist in the client entity to ensure gifts are made without any pre-conditions 
C) The amount is below what is considered to be a material payment 
D) Audit services are not provided to the client

Question 6

An unacceptable threat to independence occurs when a CPA performs nonaudit services for an audit client unless the CPA:

Accepted Answer

A) Assumes all management responsibilities 
B) Accepts management's responsibility for the services 
C) Evaluates the adequacy of the services 
D) Evaluates the results of the services 
A) Assumes all management responsibilities 
B) Accepts management's responsibility for the services 
C) Evaluates the adequacy of the services 
D) Evaluates the results of the services

Question 7

Integrity is measured in terms of what is right and just.What is a question that a CPA can ask to test decisions?

Accepted Answer

A) Am I doing what another CPA would do? 
B) Am I serving the interests of my client? 
C) Am I protecting my self-interests? 
D) Have I retained my integrity? 
A) Am I doing what another CPA would do? 
B) Am I serving the interests of my client? 
C) Am I protecting my self-interests? 
D) Have I retained my integrity?

Question 8

Each of the following is a threat to independence except:

Accepted Answer

A) Self-review threat 
B) Adverse interest threat 
C) Self-interest threat 
D) Undue influence threat 
A) Self-review threat 
B) Adverse interest threat 
C) Self-interest threat 
D) Undue influence threat

Question 9

Which of the following is NOT an outright restriction on providing nonattest services for an attest client?

Accepted Answer

A) Tax services 
B) Financial information systems design and implementation 
C) Appraisal or valuation services 
D) Internal audit outsourcing services 
A) Tax services 
B) Financial information systems design and implementation 
C) Appraisal or valuation services 
D) Internal audit outsourcing services

Question 10

Why don't auditors prepare financial statements,as well as audit them?

Accepted Answer

A) It would take away a job from the controller of the company 
B) It would not eliminate errors in the financial statements 
C) It would be a conflict of interest and violate ethical standards 
D) It would not streamline the process and be effective 
A) It would take away a job from the controller of the company 
B) It would not eliminate errors in the financial statements 
C) It would be a conflict of interest and violate ethical standards 
D) It would not streamline the process and be effective

Question 11

In Han,Kang & Lee,LLC,the main accounting issue being discussed with the client is:

Accepted Answer

A) Whether to write-down inventory by 20 percent 
B) Whether to increase the value of inventory by 20 percent 
C) Whether to record an expenditure of $2 million as a capital expense and not operating expense 
D) Whether to inform the audit committee of fraud 
A) Whether to write-down inventory by 20 percent 
B) Whether to increase the value of inventory by 20 percent 
C) Whether to record an expenditure of $2 million as a capital expense and not operating expense 
D) Whether to inform the audit committee of fraud

Question 12

Which of the following is NOT something the CPA should do in tax planning?

Accepted Answer

A) Uncritically accept the client's explanations for assumptions and representations 
B) Establish the relevant background facts 
C) Consider the reasonableness of the assumptions and representations 
D) Consider the business purpose and economic substance of the transaction,if relevant to the tax consequences of the transaction 
A) Uncritically accept the client's explanations for assumptions and representations 
B) Establish the relevant background facts 
C) Consider the reasonableness of the assumptions and representations 
D) Consider the business purpose and economic substance of the transaction,if relevant to the tax consequences of the transaction

Question 13

One of the Contributions of the Treadway Commission Report and the work of the Committee of Sponsoring Organizations (COSO) was:

Accepted Answer

A) To establish a voluntary process for peer review 
B) To identify red flags that might lead to fraud 
C) To identify the tone at the top for management to create an ethical culture 
D) To establish peer review requirements for CPAs 
A) To establish a voluntary process for peer review 
B) To identify red flags that might lead to fraud 
C) To identify the tone at the top for management to create an ethical culture 
D) To establish peer review requirements for CPAs

Question 14

Why do CPAs have to be aware of ethical conflicts in performing professional services and which rules of conduct are most directly affected by the evaluation? How do CPAs assess risks due to ethical conflicts and possible impairments of the rules?

Accepted Answer

Under the Revised Code,when evaluating w

Question 15

Why is professional judgment important in accounting?

Accepted Answer

Professional judgment is the basis for d

Question 16

George has been asked by his audit client to provide income tax services including tax planning.Prior to providing such services,George should be certain that:

Accepted Answer

A) He first completes the audit 
B) He assesses threats to independence 
C) The CEO pre-approves the performance of such services 
D) The board of directors is informed about such services 
A) He first completes the audit 
B) He assesses threats to independence 
C) The CEO pre-approves the performance of such services 
D) The board of directors is informed about such services

Question 17

The KPMG Professional Judgment Framework defines judgment as:

Accepted Answer

A) The process of reaching a decision or drawing a conclusion where there are a number of possible alternative solutions 
B) The process of making a judgment where there are a number of possible virtues 
C) The process of acting in accordance with the AICPA Code 
D) The process of deciding when giving voice to one's values 
A) The process of reaching a decision or drawing a conclusion where there are a number of possible alternative solutions 
B) The process of making a judgment where there are a number of possible virtues 
C) The process of acting in accordance with the AICPA Code 
D) The process of deciding when giving voice to one's values

Question 18

Professional judgment is influenced by:

Accepted Answer

A) Organizational values 
B) Personal code of ethics 
C) Personal behavioral traits 
D) Organizational dissonance 
A) Organizational values 
B) Personal code of ethics 
C) Personal behavioral traits 
D) Organizational dissonance

Question 19

Under the Sarbanes-Oxley Act,the auditor's responsibility with respect to internal controls can best be stated as:

Accepted Answer

A) Develop a system of internal controls that help to prevent and detect fraud 
B) Assess whether the internal controls help to prevent and detect fraud 
C) Assess management's report on internal controls 
D) Prepare a report on internal controls to be provided to management 
A) Develop a system of internal controls that help to prevent and detect fraud 
B) Assess whether the internal controls help to prevent and detect fraud 
C) Assess management's report on internal controls 
D) Prepare a report on internal controls to be provided to management

Question 20

CPAs in business face threats to independence just as CPAs in public practice.Which of the following threats do not exist for CPAs in business?

Accepted Answer

A) Adverse interest threat 
B) Advocacy threat 
C) Self-interest threat 
D) Management participation threat 
A) Adverse interest threat 
B) Advocacy threat 
C) Self-interest threat 
D) Management participation threat

Each of the following were themes of Congressional investigations of the accounting profession during the 1970s and 1980s except:

The insider trading case against Scott London focused on:

Jacob just joined the firm of Gordon & Towns LLC.Prior to beginning his first group audit assignment,Jacob asks to meet with his mentor,Isaac.He asks Isaac how making judgments in an audit team setting differs from running an audit oneself.What is the best advice for Isaac to give to Jacob?

The committee that first recommended that the profession institute a voluntary program for peer review was:

A CPA can accept a gift from a client as long as:

An unacceptable threat to independence occurs when a CPA performs nonaudit services for an audit client unless the CPA:

Integrity is measured in terms of what is right and just.What is a question that a CPA can ask to test decisions?

Each of the following is a threat to independence except:

Which of the following is NOT an outright restriction on providing nonattest services for an attest client?

Why don't auditors prepare financial statements,as well as audit them?

In Han,Kang & Lee,LLC,the main accounting issue being discussed with the client is:

Which of the following is NOT something the CPA should do in tax planning?

One of the Contributions of the Treadway Commission Report and the work of the Committee of Sponsoring Organizations (COSO) was:

Why do CPAs have to be aware of ethical conflicts in performing professional services and which rules of conduct are most directly affected by the evaluation? How do CPAs assess risks due to ethical conflicts and possible impairments of the rules?

Why is professional judgment important in accounting?

George has been asked by his audit client to provide income tax services including tax planning.Prior to providing such services,George should be certain that:

The KPMG Professional Judgment Framework defines judgment as:

Professional judgment is influenced by:

Under the Sarbanes-Oxley Act,the auditor's responsibility with respect to internal controls can best be stated as:

CPAs in business face threats to independence just as CPAs in public practice.Which of the following threats do not exist for CPAs in business?

Ethical Reasoning: Implications for Accounting

Cognitive Processes and Ethical Decision Making in Accounting

Organizational Ethics and Corporate Governance

Fraud in Financial Statements and Auditor Responsibilities

Legal, Regulatory, and Professional Obligations of Auditors

Earnings Management

Ethical Leadership and Decision-Making in Accounting

Filters

Exam 4: Ethics and Professional Judgment in Accounting

Each of the following were themes of Congressional investigations of the accounting profession during the 1970s and 1980s except:

The insider trading case against Scott London focused on:

Jacob just joined the firm of Gordon & Towns LLC.Prior to beginning his first group audit assignment,Jacob asks to meet with his mentor,Isaac.He asks Isaac how making judgments in an audit team setting differs from running an audit oneself.What is the best advice for Isaac to give to Jacob?

The committee that first recommended that the profession institute a voluntary program for peer review was:

A CPA can accept a gift from a client as long as:

An unacceptable threat to independence occurs when a CPA performs nonaudit services for an audit client unless the CPA:

Integrity is measured in terms of what is right and just.What is a question that a CPA can ask to test decisions?

Each of the following is a threat to independence except:

Which of the following is NOT an outright restriction on providing nonattest services for an attest client?

Why don't auditors prepare financial statements,as well as audit them?

In Han,Kang & Lee,LLC,the main accounting issue being discussed with the client is:

Which of the following is NOT something the CPA should do in tax planning?

One of the Contributions of the Treadway Commission Report and the work of the Committee of Sponsoring Organizations (COSO) was:

Why do CPAs have to be aware of ethical conflicts in performing professional services and which rules of conduct are most directly affected by the evaluation? How do CPAs assess risks due to ethical conflicts and possible impairments of the rules?

Why is professional judgment important in accounting?

George has been asked by his audit client to provide income tax services including tax planning.Prior to providing such services,George should be certain that:

The KPMG Professional Judgment Framework defines judgment as:

Professional judgment is influenced by:

Under the Sarbanes-Oxley Act,the auditor's responsibility with respect to internal controls can best be stated as:

CPAs in business face threats to independence just as CPAs in public practice.Which of the following threats do not exist for CPAs in business?

Ethical Reasoning: Implications for Accounting

Cognitive Processes and Ethical Decision Making in Accounting

Organizational Ethics and Corporate Governance

Fraud in Financial Statements and Auditor Responsibilities

Legal, Regulatory, and Professional Obligations of Auditors

Earnings Management

Ethical Leadership and Decision-Making in Accounting

Filters