Question 1

Civil RICO provisions in effect characterize accountants as ________.

Accepted Answer

A) fraudsters 
B) racketeers 
C) scapegoats 
D) incompetent 
A) fraudsters 
B) racketeers 
C) scapegoats 
D) incompetent B

Question 2

In the course of performing an audit,an auditor begins dating the CFO of the auditee.What kind of threat to independence might arise?

Accepted Answer

A) Self-review threat. 
B) Self-interest threat. 
C) Familiarity threat. 
D) Intimidation threat. 
A) Self-review threat. 
B) Self-interest threat. 
C) Familiarity threat. 
D) Intimidation threat. C

Question 3

In addition to liabilities imposed by common law,auditors need also be concerned about what other type of liability?

Accepted Answer

A) Statutory law. 
B) Tort law. 
C) Professional liability. 
D) Negligence. 
A) Statutory law. 
B) Tort law. 
C) Professional liability. 
D) Negligence. A

Question 4

If a party is found to be partially liable and thus only responsible for paying part of the damages relative to their share of the blame,this is known as ________.

Accepted Answer

A) due care 
B) breaking even 
C) proportionate liability 
D) a tort 
A) due care 
B) breaking even 
C) proportionate liability 
D) a tort

Question 5

What is meant by "privity?"

Accepted Answer

The relationship of direct involvement b

Question 6

Legal liabilities of professional accountants arise only from lawsuits brought on the basis of the law of contracts.

Accepted Answer

A) True 
 B)False

Question 7

A private or civil wrong or injury is known as a ________.

Accepted Answer

A) breach 
B) tort 
C) misconduct 
D) deceit 
A) breach 
B) tort 
C) misconduct 
D) deceit

Question 8

"Let your conscience be your guide" is an ethical principle that fits all situations.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following philosophical principles of ethics places emphasis on the consequences of action,rather than on following the rules?

Accepted Answer

A) Imperative principle. 
B) Utilitarianism principle. 
C) Generalization principle. 
D) Moral principle. 
A) Imperative principle. 
B) Utilitarianism principle. 
C) Generalization principle. 
D) Moral principle.

Question 10

Auditors need not be concerned about statutory law liability.

Accepted Answer

A) True 
 B)False

Question 11

In common law actions,the burden of proof lies with the ________.

Accepted Answer

A) bailiff 
B) defendant 
C) plaintiff 
D) jury 
A) bailiff 
B) defendant 
C) plaintiff 
D) jury

Question 12

That a legal duty arises when there is a contractual agreement with the client is called ________.

Accepted Answer

A) standard of care 
B) privity of contract 
C) professionalism 
D) independence 
A) standard of care 
B) privity of contract 
C) professionalism 
D) independence

Question 13

A complaint has been made against a member for an audit failure.If this complaint is found to have merit,under which ICAO Rule of Professional Conduct is the member likely to be charged?

Accepted Answer

A) § 202 Integrity and due care. 
B) § 204 Independence. 
C) § 210 Conflict of interest. 
D) § 215 Contingency fees. 
A) § 202 Integrity and due care. 
B) § 204 Independence. 
C) § 210 Conflict of interest. 
D) § 215 Contingency fees.

Question 14

The goal of the critical-thinking framework reflects ________.

Accepted Answer

A) independence 
B) ideal audit virtues 
C) skepticism 
D) ethics 
A) independence 
B) ideal audit virtues 
C) skepticism 
D) ethics

Question 15

What is professional skepticism?

Accepted Answer

The auditor's tendency not to believe ma

Question 16

The "Rules of Professional Conduct," state the set of very specific rules that flow from the general principles and are considered to be minimum standards.

Accepted Answer

A) True 
 B)False

Question 17

The "Rules of Professional Conduct" for professional accountants apply to services performed by members in both public and private practice.

Accepted Answer

A) True 
 B)False

Question 18

Ethical theories can be divided into two types: monistic and pluralistic.Explain each.

Accepted Answer

Monistic theories assume that universal

Question 19

Consequentialism says that the right choice is the one that results in the greatest good for the greatest number of people.

Accepted Answer

A) True 
 B)False

Question 20

What must a plaintiff prove regarding an action brought under common law against a PA?

Accepted Answer

1)He or she was damaged or suffered a lo

Exam 3: Auditors Ethical and Legal Responsibilities

Civil RICO provisions in effect characterize accountants as ________.

In the course of performing an audit,an auditor begins dating the CFO of the auditee.What kind of threat to independence might arise?

In addition to liabilities imposed by common law,auditors need also be concerned about what other type of liability?

If a party is found to be partially liable and thus only responsible for paying part of the damages relative to their share of the blame,this is known as ________.

What is meant by "privity?"

Legal liabilities of professional accountants arise only from lawsuits brought on the basis of the law of contracts.

A private or civil wrong or injury is known as a ________.

"Let your conscience be your guide" is an ethical principle that fits all situations.

Which of the following philosophical principles of ethics places emphasis on the consequences of action,rather than on following the rules?

Auditors need not be concerned about statutory law liability.

In common law actions,the burden of proof lies with the ________.

That a legal duty arises when there is a contractual agreement with the client is called ________.

A complaint has been made against a member for an audit failure.If this complaint is found to have merit,under which ICAO Rule of Professional Conduct is the member likely to be charged?

The goal of the critical-thinking framework reflects ________.

What is professional skepticism?

The "Rules of Professional Conduct," state the set of very specific rules that flow from the general principles and are considered to be minimum standards.

The "Rules of Professional Conduct" for professional accountants apply to services performed by members in both public and private practice.

Ethical theories can be divided into two types: monistic and pluralistic.Explain each.

Consequentialism says that the right choice is the one that results in the greatest good for the greatest number of people.

What must a plaintiff prove regarding an action brought under common law against a PA?

Introduction to Auditing

Auditors Professional Roles and Responsibilities

Reports on Audited Financial Statements

Preliminary Audit Planning: Understanding the Auditees Business

Assessing Risks in an Audit Engagement

Internal Control Over Financial Reporting

Audit Evidence and Assurance

Control Assessment and Testing

Audit Sampling

The Revenues, Receivables, and Receipts Process and Cash Account Balance

The Purchases, Payables, and Payments Process

Payroll and Production Processes

The Finance and Investment Process

hapter 15 Completing the Audit Work

Applying Professional Judgment to Form the Audit Opinion and Issue the Audit Report

Other Public Accounting Services and Reportsreviews and Compilations

Professional Rules of Conduct Details and Auditor Responsibilities

The Audit of Accounting Estimates: Basic Material Relating to Accounting Estimates

Legal Liability Cases

Other Professional Accounting Services and Reports, Including Fraud Auditing

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