Question 1

Which of the following is allowable for a CPA?

Accepted Answer

A)  A used car loan from a banking client where the client has a lien on the car. 
B)  An uncollateralized signature loan from a client. 
C)  Owning more than five percent of the outstanding shares of client stock in a retirement account. 
D)  The audit engagement partner (or partner equivalent) serves on the client's audit committee. 
A)  A used car loan from a banking client where the client has a lien on the car. 
B)  An uncollateralized signature loan from a client. 
C)  Owning more than five percent of the outstanding shares of client stock in a retirement account. 
D)  The audit engagement partner (or partner equivalent) serves on the client's audit committee.

Question 2

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 3

The profession's ethical standards would most likely be considered to have been violated when the CPA represents that specific consulting services will be performed for a stated fee and it is apparent at the time of the representation that the

Accepted Answer

A)  CPA would not be independent. 
B)  fee was a competitive bid. 
C)  actual fee would be substantially higher. 
D)  actual fee would be substantially lower than the fees charged by other CPAs for comparable services. 
A)  CPA would not be independent. 
B)  fee was a competitive bid. 
C)  actual fee would be substantially higher. 
D)  actual fee would be substantially lower than the fees charged by other CPAs for comparable services.

Question 4

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 5

Which of the following is required for a firm to designate itself as a "Member of the American Institute of Certified Public Accountants" on its letterhead?

Accepted Answer

A)  At least one of the partners must be a member. 
B)  The partners whose names appear in the firm name must be members. 
C)  All partners must be members. 
D)  The firm must be a dues-paying member. 
A)  At least one of the partners must be a member. 
B)  The partners whose names appear in the firm name must be members. 
C)  All partners must be members. 
D)  The firm must be a dues-paying member.

Question 6

Mavis,CPA,has audited the financial statements of South Bay Sales Incorporated for several years and had always been paid promptly for services rendered.Last year's audit invoices have not been paid because South Bay is experiencing cash flow difficulties and the current year's audit is scheduled to commence in one week.With respect to the past due audit fees,Mavis should

Accepted Answer

A)  perform the scheduled audit and allow South Bay to pay when the cash flow difficulties are alleviated. 
B)  perform the scheduled audit only after arranging a definite payment schedule and securing notes signed by South Bay. 
C)  inform South Bay's management that the past due audit fees are considered an impairment of auditor independence. 
D)  inform South Bay's management that the past due audit fees may be considered a loan on which interest must be imputed for financial statement purposes. 
A)  perform the scheduled audit and allow South Bay to pay when the cash flow difficulties are alleviated. 
B)  perform the scheduled audit only after arranging a definite payment schedule and securing notes signed by South Bay. 
C)  inform South Bay's management that the past due audit fees are considered an impairment of auditor independence. 
D)  inform South Bay's management that the past due audit fees may be considered a loan on which interest must be imputed for financial statement purposes.

Question 7

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 8

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 9

In which one of the following situations would a CPA be in violation of the AICPA Code of Professional Conduct in determining a fee?

Accepted Answer

A)  A fee based on whether the CPA's report on the client's financial statements results in the approval of a bank loan. 
B)  A fee based on an estimate of the number of hours needed to complete the engagement by auditors of various levels of experience. 
C)  A fee based on the nature of the service rendered and the CPA's particular expertise instead of the actual time spent on the engagement. 
D)  A fee based on the fee charged by the prior auditor. 
A)  A fee based on whether the CPA's report on the client's financial statements results in the approval of a bank loan. 
B)  A fee based on an estimate of the number of hours needed to complete the engagement by auditors of various levels of experience. 
C)  A fee based on the nature of the service rendered and the CPA's particular expertise instead of the actual time spent on the engagement. 
D)  A fee based on the fee charged by the prior auditor.

Question 10

Following the issuance of a PCAOB draft report,how many days does the CPA firm have to respond to accusations?

Accepted Answer

A)  10 days. 
B)  30 days. 
C)  50 days. 
D)  90 days. 
A)  10 days. 
B)  30 days. 
C)  50 days. 
D)  90 days.

Question 11

The term "ethics" refers to a person's propensity to follow the laws of the land.

Accepted Answer

A) True 
 B)False

Question 12

The quality control standards are concerned primarily with

Accepted Answer

A)  actions of individual auditors. 
B)  a firm's monitoring of its practice. 
C)  disciplinary actions against individual auditors. 
D)  preventing legal action. 
A)  actions of individual auditors. 
B)  a firm's monitoring of its practice. 
C)  disciplinary actions against individual auditors. 
D)  preventing legal action.

Which of the following is allowable for a CPA?

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?

The profession's ethical standards would most likely be considered to have been violated when the CPA represents that specific consulting services will be performed for a stated fee and it is apparent at the time of the representation that the

Which of the following is required for a firm to designate itself as a "Member of the American Institute of Certified Public Accountants" on its letterhead?

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

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

In which one of the following situations would a CPA be in violation of the AICPA Code of Professional Conduct in determining a fee?

Following the issuance of a PCAOB draft report,how many days does the CPA firm have to respond to accusations?

The term "ethics" refers to a person's propensity to follow the laws of the land.

The quality control standards are concerned primarily with

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 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,amd Internal Auditing Services-professional Judgement Module

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Exam 19: Professsional Conduct,Independence,and Quality Control

Which of the following is allowable for a CPA?

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?

The profession's ethical standards would most likely be considered to have been violated when the CPA represents that specific consulting services will be performed for a stated fee and it is apparent at the time of the representation that the

Which of the following is required for a firm to designate itself as a "Member of the American Institute of Certified Public Accountants" on its letterhead?

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

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

In which one of the following situations would a CPA be in violation of the AICPA Code of Professional Conduct in determining a fee?

Following the issuance of a PCAOB draft report,how many days does the CPA firm have to respond to accusations?

The term "ethics" refers to a person's propensity to follow the laws of the land.

The quality control standards are concerned primarily with

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 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,amd Internal Auditing Services-professional Judgement Module

Filters