Question 1

Principles are stated at a conceptual level,not a detailed level.

Accepted Answer

A) True 
 B)False

Question 2

Match between columns
                        Premises: Partner
Professional services
Practice of public accounting
Client
Attest engagement
Holding out

Accepted Answer

The Answer of Examples include financial statement audits, reviews, and is...

Question 3

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

Question 4

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 5

Which of the following statements best describes why the profession of certified public accountants has deemed it essential to promulgate a code of conduct and to establish a mechanism for enforcing observance of the code?

Accepted Answer

A)  Ethical standards are established so that users of accounting services know what to expect, the professionals know what behaviors are acceptable, and overseers can take disciplinary action when appropriate. 
B)  A prerequisite to success is the establishment of an ethical code that stresses primarily the professional's responsibility to clients and colleagues. 
C)  A requirement of most state laws calls for the profession to establish a code of conduct. 
D)  An essential means of self-protection for the profession is the establishment of flexible ethical standards by the profession. 
A)  Ethical standards are established so that users of accounting services know what to expect, the professionals know what behaviors are acceptable, and overseers can take disciplinary action when appropriate. 
B)  A prerequisite to success is the establishment of an ethical code that stresses primarily the professional's responsibility to clients and colleagues. 
C)  A requirement of most state laws calls for the profession to establish a code of conduct. 
D)  An essential means of self-protection for the profession is the establishment of flexible ethical standards by the profession.

Question 6

With respect to ethics,the utilitarian theory

Accepted Answer

A)  Suggests that auditors should always verify ownership of a client's material tangible assets. 
B)  Is primarily concerned with equity and impartiality. 
C)  Suggests that an individual's actions should not violate the rights of any individual. 
D)  Recognizes that decisions involve trade-offs between costs and benefits. 
A)  Suggests that auditors should always verify ownership of a client's material tangible assets. 
B)  Is primarily concerned with equity and impartiality. 
C)  Suggests that an individual's actions should not violate the rights of any individual. 
D)  Recognizes that decisions involve trade-offs between costs and benefits.

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

According to the Code of Professional Conduct,which of the following individuals is not in a position to influence an attest engagement (i.e.,not a covered member)?

Accepted Answer

A)  The office's managing partner who determines the compensation of the attest engagement partner. 
B)  The office's IT expert, who consulted with the engagement partner regarding the client's IT system. 
C)  The partner in another office in a nearby city who regularly plays golf with the engagement partner. 
D)  The office's partner who monitors quality control over the attest engagement. 
A)  The office's managing partner who determines the compensation of the attest engagement partner. 
B)  The office's IT expert, who consulted with the engagement partner regarding the client's IT system. 
C)  The partner in another office in a nearby city who regularly plays golf with the engagement partner. 
D)  The office's partner who monitors quality control over the attest engagement.

Question 9

A violation of the profession's ethical standards would least likely have occurred when a CPA in public practice

Accepted Answer

A)  Used a records-retention agency to store the CPA's working papers and client records. 
B)  Served as an expert witness in a damage suit and received compensation based on the amount awarded to the plaintiff. 
C)  Referred life insurance assignments to the CPA's spouse, who is a life insurance agent. 
D)  Failed to file his personal tax return. 
A)  Used a records-retention agency to store the CPA's working papers and client records. 
B)  Served as an expert witness in a damage suit and received compensation based on the amount awarded to the plaintiff. 
C)  Referred life insurance assignments to the CPA's spouse, who is a life insurance agent. 
D)  Failed to file his personal tax return.

Question 10

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 11

Listed below are definitions of the six Principles of Professional Conduct.For each,identify the principle being defined.
a.A member should observe the profession's technical and ethical standards,strive continually to improve competence and the quality of services,and discharge professional responsibility to the best of the member's ability.
b.Members should exercise sensitive professional and moral judgments in all their activities.
c.A member should be free of conflicts of interest in discharging professional responsibilities.
d.A member in public practice should observe the Principles of the Code of Professional Conduct in determining the type and extent of services to be provided.
e.Members should accept the obligation to act in a way that will honor the public trust and demonstrate commitment to professionalism.
f.To maintain and broaden public confidence,members should perform all professional responsibilities with the highest sense of ______________.

Accepted Answer

a.Due care.
b.Responsibilities

Question 12

In performing an audit,Jackson,CPA,discovers that the professional competence necessary for the engagement is lacking.Jackson informs management of the situation and recommends another local CPA firm and management engages this other firm.Under these circumstances

Accepted Answer

A)  Jackson may request compensation from the other CPA firm for any professional services rendered to it in connection with the engagement. 
B)  Jackson may accept a referral fee from the other CPA firm. 
C)  Jackson has violated the AICPA Code of Professional Conduct because of non-fulfillment of the duty of performance. 
D)  Jackson's lack of competence should be construed to be a violation of generally accepted auditing standards. 
A)  Jackson may request compensation from the other CPA firm for any professional services rendered to it in connection with the engagement. 
B)  Jackson may accept a referral fee from the other CPA firm. 
C)  Jackson has violated the AICPA Code of Professional Conduct because of non-fulfillment of the duty of performance. 
D)  Jackson's lack of competence should be construed to be a violation of generally accepted auditing standards.

Question 13

With respect to ethics,the rights-based approach

Accepted Answer

A)  Suggests that auditors should always verify ownership of a client's material tangible assets. 
B)  Is primarily concerned with equity and impartiality. 
C)  Suggests that an individual's actions should not violate the rights of any individual. 
D)  Recognizes that decisions involve trade-offs between costs and benefits. 
A)  Suggests that auditors should always verify ownership of a client's material tangible assets. 
B)  Is primarily concerned with equity and impartiality. 
C)  Suggests that an individual's actions should not violate the rights of any individual. 
D)  Recognizes that decisions involve trade-offs between costs and benefits.

Principles are stated at a conceptual level,not a detailed level.

For private companies,accounting firms are prohibited from providing

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 statements best describes why the profession of certified public accountants has deemed it essential to promulgate a code of conduct and to establish a mechanism for enforcing observance of the code?

With respect to ethics,the utilitarian theory

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

According to the Code of Professional Conduct,which of the following individuals is not in a position to influence an attest engagement (i.e.,not a covered member)?

A violation of the profession's ethical standards would least likely have occurred when a CPA in public practice

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

In performing an audit,Jackson,CPA,discovers that the professional competence necessary for the engagement is lacking.Jackson informs management of the situation and recommends another local CPA firm and management engages this other firm.Under these circumstances

With respect to ethics,the rights-based approach

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

Assurance,Attestation,and Internal Auditing Services

Auditing the Financinginvesting Process: Prepaid Expenses, Intangible Assets, and Property, Plant, and Equipment

Auditing the Financinginvesting 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

Principles are stated at a conceptual level,not a detailed level.

For private companies,accounting firms are prohibited from providing

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 statements best describes why the profession of certified public accountants has deemed it essential to promulgate a code of conduct and to establish a mechanism for enforcing observance of the code?

With respect to ethics,the utilitarian theory

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

According to the Code of Professional Conduct,which of the following individuals is not in a position to influence an attest engagement (i.e.,not a covered member)?

A violation of the profession's ethical standards would least likely have occurred when a CPA in public practice

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

In performing an audit,Jackson,CPA,discovers that the professional competence necessary for the engagement is lacking.Jackson informs management of the situation and recommends another local CPA firm and management engages this other firm.Under these circumstances

With respect to ethics,the rights-based approach

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

Assurance,Attestation,and Internal Auditing Services

Auditing the Financinginvesting Process: Prepaid Expenses, Intangible Assets, and Property, Plant, and Equipment

Auditing the Financinginvesting 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