Question 1

Explain how the ICAO enforces the "fundamental statements of accepted conduct" and the "Rules of Professional Conduct."

Accepted Answer

The fundamental statements of accepted c

Question 2

A client's management claims that they have to restrict an auditor's access to a research laboratory to protect the safety of the auditor.This could be an example of a lack of ________.

Accepted Answer

A) programming independence 
B) investigative independence 
C) control independence 
D) reporting independence 
A) programming independence 
B) investigative independence 
C) control independence 
D) reporting independence

Question 3

A succinct,but comprehensive definition of independence is that an auditor ________.

Accepted Answer

A) must be independent in fact and in appearance in order to maintain credibility 
B) must not have a direct financial interest in a client 
C) must have a licence to practise as a public accountant 
D) must not take on as an audit client a company owned by a member of his or her immediate family 
A) must be independent in fact and in appearance in order to maintain credibility 
B) must not have a direct financial interest in a client 
C) must have a licence to practise as a public accountant 
D) must not take on as an audit client a company owned by a member of his or her immediate family

Question 4

According to the profession's rules of conduct,an auditor would be considered independent in which of the following instances?

Accepted Answer

A) The auditor is the officially appointed stock transfer agent of a client. 
B) The auditor has a personal chequing account in a branch of a client bank. 
C) The client has not paid its audit fees for the past three years. 
D) The client is the only tenant in a commercial building owned by the auditor. 
A) The auditor is the officially appointed stock transfer agent of a client. 
B) The auditor has a personal chequing account in a branch of a client bank. 
C) The client has not paid its audit fees for the past three years. 
D) The client is the only tenant in a commercial building owned by the auditor.

Question 5

How can competence and due care best be described?

Accepted Answer

A) Competence and due care both refer to the PA doing their best for their clients. 
B) Competence refers to technical ability;due care refers to strictly following official pronouncements of accounting principles. 
C) Competence is knowing what do;due care is doing it to the best of one's abilities. 
D) Competence and due care both refer to ongoing technical training. 
A) Competence and due care both refer to the PA doing their best for their clients. 
B) Competence refers to technical ability;due care refers to strictly following official pronouncements of accounting principles. 
C) Competence is knowing what do;due care is doing it to the best of one's abilities. 
D) Competence and due care both refer to ongoing technical training.

Question 6

The codified "Rules of Professional Conduct" derives its authority from the CICA Handbook.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following philosophical principles in ethics places emphasis on the importance of following rules rather than on weighing the consequences of actions?

Accepted Answer

A) Kantian principle. 
B) Utilitarian principle. 
C) Consequentialism principle. 
D) Moral principle. 
A) Kantian principle. 
B) Utilitarian principle. 
C) Consequentialism principle. 
D) Moral principle.

Question 8

The failure to perform a duty with the requisite standard of care is known as _______.

Accepted Answer

A) lack of independence 
B) negligence 
C) lack of objectivity 
D) misconduct 
A) lack of independence 
B) negligence 
C) lack of objectivity 
D) misconduct

Question 9

The familiarity threat refers to ________.

Accepted Answer

A) becoming too sympathetic to a client's interests 
B) providing assurance on one's own work 
C) promoting a client's position or opinion 
D) benefiting from a financial interest in a client 
A) becoming too sympathetic to a client's interests 
B) providing assurance on one's own work 
C) promoting a client's position or opinion 
D) benefiting from a financial interest in a client

Question 10

An ethical dilemma is one in which the choice of alternative actions affects the well-being of other persons.

Accepted Answer

A) True 
 B)False

Question 11

The auditor has a duty of care to a company that hires the auditor and has a contract with him or her under privity of contract.

Accepted Answer

A) True 
 B)False

Question 12

Many users of audit reports expect auditors to detect fraud,theft,and illegal acts,and to report them publicly.

Accepted Answer

A) True 
 B)False

Question 13

Summarize the professional competence and due care rules of the various codes of conduct.

Accepted Answer

Professional competence: Undertake only

Question 14

In a study of law cases of accountants' and auditors' legal troubles,the greatest percentage arose from ________.

Accepted Answer

A) faulty implementation of audit procedures 
B) client fraud 
C) misinterpretation of accounting principles 
D) fraud by the auditor 
A) faulty implementation of audit procedures 
B) client fraud 
C) misinterpretation of accounting principles 
D) fraud by the auditor

Question 15

Rules of professional conduct provide some direct solutions to specific,profession-related problems that may not be easily derived from general theories of ethics.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following items is the most important principle in the "fundamental statements of accepted conduct"?

Accepted Answer

A) Maintain the reputation of the profession. 
B) Act with due care. 
C) Maintain independence. 
D) Act with professional courtesy. 
A) Maintain the reputation of the profession. 
B) Act with due care. 
C) Maintain independence. 
D) Act with professional courtesy.

Question 17

What is a key characteristic of critical thinking?

Accepted Answer

A) It is a means of eliminating alternatives to arrive at one right answer. 
B) It requires making the right assumptions to support an argument. 
C) It requires a questioning mind. 
D) It is a means of picking out things wrong with another person's argument. 
A) It is a means of eliminating alternatives to arrive at one right answer. 
B) It requires making the right assumptions to support an argument. 
C) It requires a questioning mind. 
D) It is a means of picking out things wrong with another person's argument.

Question 18

If a professional accountant is convicted of a criminal offence or fraud,he or she is usually thrown out of the profession.

Accepted Answer

A) True 
 B)False

Question 19

(p.None)It is sometimes said that there is a strong link between codes of conduct and GAAS.Explain.

Accepted Answer

Codes of conduct can be viewed

Question 20

Explain the difference among integrity,independence,and objectivity.

Accepted Answer

Integrity: Integrity is the duty to be h

Exam 3: Auditors Ethical and Legal Responsibilities

Explain how the ICAO enforces the "fundamental statements of accepted conduct" and the "Rules of Professional Conduct."

A client's management claims that they have to restrict an auditor's access to a research laboratory to protect the safety of the auditor.This could be an example of a lack of ________.

A succinct,but comprehensive definition of independence is that an auditor ________.

According to the profession's rules of conduct,an auditor would be considered independent in which of the following instances?

How can competence and due care best be described?

The codified "Rules of Professional Conduct" derives its authority from the CICA Handbook.

Which of the following philosophical principles in ethics places emphasis on the importance of following rules rather than on weighing the consequences of actions?

The failure to perform a duty with the requisite standard of care is known as _______.

The familiarity threat refers to ________.

An ethical dilemma is one in which the choice of alternative actions affects the well-being of other persons.

The auditor has a duty of care to a company that hires the auditor and has a contract with him or her under privity of contract.

Many users of audit reports expect auditors to detect fraud,theft,and illegal acts,and to report them publicly.

Summarize the professional competence and due care rules of the various codes of conduct.

In a study of law cases of accountants' and auditors' legal troubles,the greatest percentage arose from ________.

Rules of professional conduct provide some direct solutions to specific,profession-related problems that may not be easily derived from general theories of ethics.

Which of the following items is the most important principle in the "fundamental statements of accepted conduct"?

What is a key characteristic of critical thinking?

If a professional accountant is convicted of a criminal offence or fraud,he or she is usually thrown out of the profession.

(p.None)It is sometimes said that there is a strong link between codes of conduct and GAAS.Explain.

Explain the difference among integrity,independence,and objectivity.

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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