Question 1

The primary purpose of establishing quality control policies and procedures for deciding whether to accept a new client is to

Accepted Answer

A)  Enable the CPA firm to attest to the reliability of the client. 
B)  Satisfy the CPA firm's duty to the public concerning the acceptance of new clients. 
C)  Minimize the likelihood of association with clients whose management lacks integrity. 
D)  Anticipate before performing any fieldwork whether an unqualified opinion can be expressed. 
A)  Enable the CPA firm to attest to the reliability of the client. 
B)  Satisfy the CPA firm's duty to the public concerning the acceptance of new clients. 
C)  Minimize the likelihood of association with clients whose management lacks integrity. 
D)  Anticipate before performing any fieldwork whether an unqualified opinion can be expressed.

Question 2

For private companies, accounting firms are prohibited from providing

Accepted Answer

A)  Outsourced internal audit services. 
B)  Audit services. 
C)  Review services. 
D)  None of these. 
A)  Outsourced internal audit services. 
B)  Audit services. 
C)  Review services. 
D)  None of these.

Question 3

When can a CPA disclose confidential information without the client's consent?

Accepted Answer

A CPA can disclose confidential informat

Question 4

Ms. Lembke is a partner for DTS, a CPA firm. She is the lead partner for the firm's largest client, The Grey Elephant. Ms. Zadina, who works in the same office as Ms. Lembke, has a sister who is the controller for The Grey Elephant. Because of potential independence issues, Ms. Zadina does no work for The Grey Elephant. Ms. Zadina is being considered for promotion to partner. What independence issues should Ms. Lembke consider before promoting Ms. Zadina?

Accepted Answer

Interpretation 101-1 of the AICPA Rules

Question 5

A CPA firm would be reasonably assured of meeting its overall responsibility to provide services that conform with professional standards by

Accepted Answer

A)  Adhering to generally accepted accounting principles. 
B)  Implementing an appropriate system of quality control. 
C)  Joining professional societies that enforce ethical conduct. 
D)  Maintaining an attitude of independence in its engagements. 
A)  Adhering to generally accepted accounting principles. 
B)  Implementing an appropriate system of quality control. 
C)  Joining professional societies that enforce ethical conduct. 
D)  Maintaining an attitude of independence in its engagements.

Question 6

A basic objective of a CPA firm is to provide professional services that conform to professional standards. Reasonable assurance of achieving this basic objective is provided through

Accepted Answer

A)  Compliance with generally accepted reporting standards. 
B)  A system of quality control. 
C)  A system of peer review. 
D)  Continuing professional education. 
A)  Compliance with generally accepted reporting standards. 
B)  A system of quality control. 
C)  A system of peer review. 
D)  Continuing professional education.

Question 7

The AICPA Code of Professional Conduct deals mainly with behavior and actions of individual auditors.

Accepted Answer

A) True 
 B)False

Question 8

If a CPA owns an insurance policy issued by an attest client, independence would be considered impaired, even if the policy was purchased under the insurance company's normal terms and procedures and does not offer an investment option.

Accepted Answer

A) True 
 B)False

Question 9

In auditing a privately held entity, an auditor must follow the professional standards established by all of the following except:

Accepted Answer

A)  The AICPA's Auditing Standards Board. 
B)  The Professional Code of Conduct. 
C)  The Independence Standards Board. 
D)  The PCAOB. 
A)  The AICPA's Auditing Standards Board. 
B)  The Professional Code of Conduct. 
C)  The Independence Standards Board. 
D)  The PCAOB.

Question 10

Professionalism refers to the conduct, aims, or qualities that characterize or mark a given profession.

Accepted Answer

A) True 
 B)False

Question 11

Match each term below with its definition as provided by the AICPA Rules of Conduct.

Accepted Answer

The answer of Match each term below with its definition...

Question 12

According to the ethical standards of the profession, which of the following acts is generally prohibited?

Accepted Answer

A)  Purchasing a product from a third party and reselling it to a client. 
B)  Writing a financial management newsletter promoted and sold by a publishing company. 
C)  Accepting a commission for recommending a product to an audit client. 
D)  Accepting engagements obtained through the efforts of third parties. 
A)  Purchasing a product from a third party and reselling it to a client. 
B)  Writing a financial management newsletter promoted and sold by a publishing company. 
C)  Accepting a commission for recommending a product to an audit client. 
D)  Accepting engagements obtained through the efforts of third parties.

Question 13

A CPA firm evaluates its personnel advancement experience to ascertain whether individuals assigned to increased degrees of responsibility meet predetermined criteria. This policy is evidence of the firm's adherence to which of the following prescribed standards?

Accepted Answer

A)  Professional ethics. 
B)  Supervision and review. 
C)  Accounting and review services. 
D)  Quality control. 
A)  Professional ethics. 
B)  Supervision and review. 
C)  Accounting and review services. 
D)  Quality control.

Question 14

Which professional and regulatory bodies establish the ethical and professional rules for auditors of: (1) public companies and (2) private companies?

Accepted Answer

(1) The principles, rules, and regulatio

Question 15

Ethical rulings are enforceable.

Accepted Answer

A) True 
 B)False

Question 16

Distinguish between the following theories of ethical behavior: utilitarianism, a rights-based approach, and a justice-based approach.

Accepted Answer

Utilitarianism focuses on the consequenc

Question 17

The rules contained in Section 100 cover issues relating to independence, integrity, and auditing standards.

Accepted Answer

A) True 
 B)False

Question 18

In connection with a lawsuit, a third party attempts to gain access to the auditor's working papers. The client's defense of privileged communication will be successful only to the extent it is protected by the

Accepted Answer

A)  Auditor's acquiescence in use of this defense. 
B)  Common law. 
C)  AICPA Code of Professional Conduct. 
D)  State law. 
A)  Auditor's acquiescence in use of this defense. 
B)  Common law. 
C)  AICPA Code of Professional Conduct. 
D)  State law.

Question 19

An indirect financial interest is defined as a financial interest that is owned or is under the control of an individual or entity.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is not a Principle of Professional Conduct as defined by the Code of Professional Conduct?

Accepted Answer

A)  Integrity. 
B)  Due care. 
C)  Reporting. 
D)  Scope and nature of services. 
A)  Integrity. 
B)  Due care. 
C)  Reporting. 
D)  Scope and nature of services.

The primary purpose of establishing quality control policies and procedures for deciding whether to accept a new client is to

For private companies, accounting firms are prohibited from providing

When can a CPA disclose confidential information without the client's consent?

A CPA firm would be reasonably assured of meeting its overall responsibility to provide services that conform with professional standards by

A basic objective of a CPA firm is to provide professional services that conform to professional standards. Reasonable assurance of achieving this basic objective is provided through

The AICPA Code of Professional Conduct deals mainly with behavior and actions of individual auditors.

If a CPA owns an insurance policy issued by an attest client, independence would be considered impaired, even if the policy was purchased under the insurance company's normal terms and procedures and does not offer an investment option.

In auditing a privately held entity, an auditor must follow the professional standards established by all of the following except:

Professionalism refers to the conduct, aims, or qualities that characterize or mark a given profession.

Match each term below with its definition as provided by the AICPA Rules of Conduct.

According to the ethical standards of the profession, which of the following acts is generally prohibited?

A CPA firm evaluates its personnel advancement experience to ascertain whether individuals assigned to increased degrees of responsibility meet predetermined criteria. This policy is evidence of the firm's adherence to which of the following prescribed standards?

Which professional and regulatory bodies establish the ethical and professional rules for auditors of: (1) public companies and (2) private companies?

Ethical rulings are enforceable.

Distinguish between the following theories of ethical behavior: utilitarianism, a rights-based approach, and a justice-based approach.

The rules contained in Section 100 cover issues relating to independence, integrity, and auditing standards.

In connection with a lawsuit, a third party attempts to gain access to the auditor's working papers. The client's defense of privileged communication will be successful only to the extent it is protected by the

An indirect financial interest is defined as a financial interest that is owned or is under the control of an individual or entity.

Which of the following is not a Principle of Professional Conduct as defined by the Code of Professional Conduct?

An Introduction to Assurance and Financial Statement Auditing

The Financial Statement Auditing Environment

Audit Planning, Types of Audit Tests, and Materiality

Risk Assessment

Evidence and Documentation

Internal Control in a Financial Statement Audit

Auditing Internal Control Over Financial Reporting

Audit Sampling: An Overview and Application to Tests of Controls

Audit Sampling: An Application to Substantive Tests of Account Balances

Auditing the Revenue Process

Auditing the Purchasing Process

Auditing the Human Resource Management Process

Auditing the Inventory Management Process

Auditing the Financing Investing Process: Prepaid Expenses Intangible Assets and Property Plant and Equipment

Auditing the Financing Investing Process: Long-Term Liabilities Stockholders Equity and Income Statement Accounts

Auditing the Financinginvesting Process: Cash and Investments

Completing the Audit Engagement

Reports on Audited Financial Statements

Legal Liability

Assurance, Attestation, and Internal Auditing Services

Filters

Exam 19: Professional Conduct, Independence, and Quality Control

The primary purpose of establishing quality control policies and procedures for deciding whether to accept a new client is to

For private companies, accounting firms are prohibited from providing

When can a CPA disclose confidential information without the client's consent?

A CPA firm would be reasonably assured of meeting its overall responsibility to provide services that conform with professional standards by

A basic objective of a CPA firm is to provide professional services that conform to professional standards. Reasonable assurance of achieving this basic objective is provided through

The AICPA Code of Professional Conduct deals mainly with behavior and actions of individual auditors.

If a CPA owns an insurance policy issued by an attest client, independence would be considered impaired, even if the policy was purchased under the insurance company's normal terms and procedures and does not offer an investment option.

In auditing a privately held entity, an auditor must follow the professional standards established by all of the following except:

Professionalism refers to the conduct, aims, or qualities that characterize or mark a given profession.

Match each term below with its definition as provided by the AICPA Rules of Conduct.

According to the ethical standards of the profession, which of the following acts is generally prohibited?

A CPA firm evaluates its personnel advancement experience to ascertain whether individuals assigned to increased degrees of responsibility meet predetermined criteria. This policy is evidence of the firm's adherence to which of the following prescribed standards?

Which professional and regulatory bodies establish the ethical and professional rules for auditors of: (1) public companies and (2) private companies?

Ethical rulings are enforceable.

Distinguish between the following theories of ethical behavior: utilitarianism, a rights-based approach, and a justice-based approach.

The rules contained in Section 100 cover issues relating to independence, integrity, and auditing standards.

In connection with a lawsuit, a third party attempts to gain access to the auditor's working papers. The client's defense of privileged communication will be successful only to the extent it is protected by the

An indirect financial interest is defined as a financial interest that is owned or is under the control of an individual or entity.

Which of the following is not a Principle of Professional Conduct as defined by the Code of Professional Conduct?

An Introduction to Assurance and Financial Statement Auditing

The Financial Statement Auditing Environment

Audit Planning, Types of Audit Tests, and Materiality

Risk Assessment

Evidence and Documentation

Internal Control in a Financial Statement Audit

Auditing Internal Control Over Financial Reporting

Audit Sampling: An Overview and Application to Tests of Controls

Audit Sampling: An Application to Substantive Tests of Account Balances

Auditing the Revenue Process

Auditing the Purchasing Process

Auditing the Human Resource Management Process

Auditing the Inventory Management Process

Auditing the Financing Investing Process: Prepaid Expenses Intangible Assets and Property Plant and Equipment

Auditing the Financing Investing Process: Long-Term Liabilities Stockholders Equity and Income Statement Accounts

Auditing the Financinginvesting Process: Cash and Investments

Completing the Audit Engagement

Reports on Audited Financial Statements

Legal Liability

Assurance, Attestation, and Internal Auditing Services

Filters