Question 1

Maralee has been approached by J.Fox Entertainment to perform an audit of her theatre company.Maralee has never audited a theatre company before.Maralee can

Accepted Answer

A) Not accept the engagement because she does not have the specialized industry knowledge. 
B) Recommend another auditor and receive a fee for the referral. 
C) Accept the engagement if she can obtain the required knowledge before the end of the engagement. 
D) Accept the engagement with the understanding that additional hours will be required for Maralee to learn and understand the nature of the business. 
A) Not accept the engagement because she does not have the specialized industry knowledge. 
B) Recommend another auditor and receive a fee for the referral. 
C) Accept the engagement if she can obtain the required knowledge before the end of the engagement. 
D) Accept the engagement with the understanding that additional hours will be required for Maralee to learn and understand the nature of the business.

Question 2

Which of the following forms of organization would NOT be allowed under the Form of Organization and Name Rule of the Professional Code of Conduct?

Accepted Answer

A) Limited liability partnership; all partners are CPAs. 
B) Limited liability partnership; 70% of partners are CPAs. 
C) Limited liability corporation; all shareholders are CPAs. 
D) Partnership; 40% of partners are CPAs. 
A) Limited liability partnership; all partners are CPAs. 
B) Limited liability partnership; 70% of partners are CPAs. 
C) Limited liability corporation; all shareholders are CPAs. 
D) Partnership; 40% of partners are CPAs.

Question 3

An interpretation of the Independence Rule allows members to

Accepted Answer

A) Hold a material indirect interest in a client. 
B) Have loans from a client that are collateralized by cash deposits held by the client. 
C) Have home mortgages with a client even if they are on the engagement. 
D) Be a trustee of a client pension or profit sharing trust. 
A) Hold a material indirect interest in a client. 
B) Have loans from a client that are collateralized by cash deposits held by the client. 
C) Have home mortgages with a client even if they are on the engagement. 
D) Be a trustee of a client pension or profit sharing trust.

Question 4

Dara & Co.audit Hill Corporation.Ellie is the engagement partner on the audit with an office in Buffalo Grove.Which of the following would NOT be considered a covered member?

Accepted Answer

A) Jason,who is a member of the attest engagement team with an office in Elmhurst. 
B) Adam,who is a tax partner and provided 50 hours of tax service to Hill Company during the year of the audit with an office in Elmhurst. 
C) Ben,a partner in Dara & Company,with an office in Buffalo Grove. 
D) Julie,a partner in Dara & Company,with an office in Elmhurst. 
A) Jason,who is a member of the attest engagement team with an office in Elmhurst. 
B) Adam,who is a tax partner and provided 50 hours of tax service to Hill Company during the year of the audit with an office in Elmhurst. 
C) Ben,a partner in Dara & Company,with an office in Buffalo Grove. 
D) Julie,a partner in Dara & Company,with an office in Elmhurst.

Question 5

According to Sarbanes-Oxley,the audit committee must pre-approve all audit and non-audit services.This can be done

Accepted Answer

A) Case-by-case basis: Yes; Through established policies: No; Delegating the responsibility: Yes 
B) Case-by-case basis: Yes; Through established policies: Yes; Delegating the responsibility: No 
C) Case-by-case basis: No; Through established policies: Yes; Delegating the responsibility: No 
D) Case-by-case basis: No; Through established policies: No; Delegating the responsibility: Yes 
A) Case-by-case basis: Yes; Through established policies: No; Delegating the responsibility: Yes 
B) Case-by-case basis: Yes; Through established policies: Yes; Delegating the responsibility: No 
C) Case-by-case basis: No; Through established policies: Yes; Delegating the responsibility: No 
D) Case-by-case basis: No; Through established policies: No; Delegating the responsibility: Yes

Question 6

Which of the following is the responsibility of the Professional Ethics Executive Committee?

Accepted Answer

A) Enforce SEC ethical standards 
B) Act as an investigative body of the AICPA when ethical violations are suspected. 
C) Make and enforce all the rules of conduct for CPAs who are AICPA members. 
D) Establish minimal ethical standards for financial reporting. 
A) Enforce SEC ethical standards 
B) Act as an investigative body of the AICPA when ethical violations are suspected. 
C) Make and enforce all the rules of conduct for CPAs who are AICPA members. 
D) Establish minimal ethical standards for financial reporting.

Maralee has been approached by J.Fox Entertainment to perform an audit of her theatre company.Maralee has never audited a theatre company before.Maralee can

Which of the following forms of organization would NOT be allowed under the Form of Organization and Name Rule of the Professional Code of Conduct?

An interpretation of the Independence Rule allows members to

Dara & Co.audit Hill Corporation.Ellie is the engagement partner on the audit with an office in Buffalo Grove.Which of the following would NOT be considered a covered member?

According to Sarbanes-Oxley,the audit committee must pre-approve all audit and non-audit services.This can be done

Which of the following is the responsibility of the Professional Ethics Executive Committee?

Auditing and Assurance Services

Professional Standards

Engagement Planning

Management Fraud and Audit Risk

Risk Assessment: Internal Control Evaluation

Employee Fraud and the Audit of Cash

Revenue and Collection Cycle

Acquisition and Expenditure Cycle

Production Cycle

Finance and Investment Cycle

Completing the Audit

Reports on Audited Financial Statements

Other Public Accounting Services

Legal Liability

Internal Audits, Governmental Audits, and Fraud Examinations

Overview of Sampling

Attributes Sampling

Variables Sampling

Auditing and Information Technology

Filters

Exam 14: Professional Ethics

Maralee has been approached by J.Fox Entertainment to perform an audit of her theatre company.Maralee has never audited a theatre company before.Maralee can

Which of the following forms of organization would NOT be allowed under the Form of Organization and Name Rule of the Professional Code of Conduct?

An interpretation of the Independence Rule allows members to

Dara & Co.audit Hill Corporation.Ellie is the engagement partner on the audit with an office in Buffalo Grove.Which of the following would NOT be considered a covered member?

According to Sarbanes-Oxley,the audit committee must pre-approve all audit and non-audit services.This can be done

Which of the following is the responsibility of the Professional Ethics Executive Committee?

Auditing and Assurance Services

Professional Standards

Engagement Planning

Management Fraud and Audit Risk

Risk Assessment: Internal Control Evaluation

Employee Fraud and the Audit of Cash

Revenue and Collection Cycle

Acquisition and Expenditure Cycle

Production Cycle

Finance and Investment Cycle

Completing the Audit

Reports on Audited Financial Statements

Other Public Accounting Services

Legal Liability

Internal Audits, Governmental Audits, and Fraud Examinations

Overview of Sampling

Attributes Sampling

Variables Sampling

Auditing and Information Technology

Filters