Question 1

What are the advantages of preparing financial statements in accordance with GAAP? What are the disadvantages?

Accepted Answer

The advantages of preparing financial st

Question 2

Which of the following acts is clearly discreditable?

Accepted Answer

A)  Creating and posting a youtube video in which a CPA berates the IRS for incompetence 
B)  Refusing to return client records, even if a CPA is owed unpaid fees, if these records are needed by the client to prepare its tax return 
C)  Commenting on "how graceful" an administrative assistant is when she wears high-heeled shoes 
D)  Mentioning on your CPA firm's website that you formerly worked for the IRS, if a reader might conclude from this statement that you are better able to negotiate favorable settlements with the IRS for clients 
A)  Creating and posting a youtube video in which a CPA berates the IRS for incompetence 
B)  Refusing to return client records, even if a CPA is owed unpaid fees, if these records are needed by the client to prepare its tax return 
C)  Commenting on "how graceful" an administrative assistant is when she wears high-heeled shoes 
D)  Mentioning on your CPA firm's website that you formerly worked for the IRS, if a reader might conclude from this statement that you are better able to negotiate favorable settlements with the IRS for clients

Question 3

Which of the following is most likely to be considered "material," even if the amounts involved are small?

Accepted Answer

A)  Amounts that cause an upward earnings trend to become even larger 
B)  Amounts that cause an earnings trend to swing from slightly positive to slightly negative 
C)  Amounts that cause reported Gross Profit to be larger than Net Income 
D)  Amounts that mask a retailer's inability to control its Cost of Goods Sold 
A)  Amounts that cause an upward earnings trend to become even larger 
B)  Amounts that cause an earnings trend to swing from slightly positive to slightly negative 
C)  Amounts that cause reported Gross Profit to be larger than Net Income 
D)  Amounts that mask a retailer's inability to control its Cost of Goods Sold

Question 4

The judge's decision in the "Continental Vending" court case:

Accepted Answer

A)  Made GAAP mandatory for all financial statements 
B)  Held that compliance with international accounting standards, rather than American accounting standards, was acceptable in the presentation of audited financial statements if the statements would predominantly be distributed to readers outside the United States 
C)  Held that compliance with international accounting standards, rather than American accounting standards, was acceptable in the presentation of audited financial statements if the statements would exclusively be distributed to readers outside the United States 
D)  Made deviation from GAAP-based presentations mandatory if the application of GAAP would be misleading 
A)  Made GAAP mandatory for all financial statements 
B)  Held that compliance with international accounting standards, rather than American accounting standards, was acceptable in the presentation of audited financial statements if the statements would predominantly be distributed to readers outside the United States 
C)  Held that compliance with international accounting standards, rather than American accounting standards, was acceptable in the presentation of audited financial statements if the statements would exclusively be distributed to readers outside the United States 
D)  Made deviation from GAAP-based presentations mandatory if the application of GAAP would be misleading

Question 5

When unaudited financial statements prepared on a basis that does not conform to GAAP are disseminated by a CPA, the CPA should:

Accepted Answer

A)  Directly contact intended recipients of these statements to inform them about the nonconformity with GAAP 
B)  Mark the statements as "Unaudited" and state that they are "Not prepared in accordance with GAAP" 
C)  Not be involved in the physical or digital transmission of these statements 
D)  Not sign any reports or statements indicating her status as a CPA 
A)  Directly contact intended recipients of these statements to inform them about the nonconformity with GAAP 
B)  Mark the statements as "Unaudited" and state that they are "Not prepared in accordance with GAAP" 
C)  Not be involved in the physical or digital transmission of these statements 
D)  Not sign any reports or statements indicating her status as a CPA

Question 6

Preparing financial statements for an unincorporated business on a basis that does not comply with GAAP usually will result in:

Accepted Answer

A)  A CPA being suspended from membership in the AICPA 
B)  A professional accountant suffering adverse professional consequences if the accountant practices in a country that has adopted IFRS 
C)  A CPA being permanently disqualified from continuing membership in the AICPA 
D)  No professional discipline as long as the noncompliance with GAAP is adequately disclosed 
A)  A CPA being suspended from membership in the AICPA 
B)  A professional accountant suffering adverse professional consequences if the accountant practices in a country that has adopted IFRS 
C)  A CPA being permanently disqualified from continuing membership in the AICPA 
D)  No professional discipline as long as the noncompliance with GAAP is adequately disclosed

Question 7

What acts are expressly identified as discreditable by the AICPA's Code of Professional Conduct?

Accepted Answer

The AICPA's Code of Professional Conduct

Question 8

The Accounting Principles Rule states that financial statements:

Accepted Answer

A)  Always must comply with GAAP 
B)  Never should contain a departure from GAAP 
C)  May contain a departure from GAAP for administrative reasons, as long as the departure is clearly disclosed 
D)  May contain a departure from GAAP if adherence to GAAP would result in the statements being misleading 
A)  Always must comply with GAAP 
B)  Never should contain a departure from GAAP 
C)  May contain a departure from GAAP for administrative reasons, as long as the departure is clearly disclosed 
D)  May contain a departure from GAAP if adherence to GAAP would result in the statements being misleading

Question 9

If financial statements contain a departure from GAAP, a CPA is:

Accepted Answer

A)  Not allowed to issue an audit report concerning the statements 
B)  Required to disclose an estimate of the approximate financial impact that the departure from GAAP had on the financial statements 
C)  Allowed to complete the current-year engagement only if the financial statements are utilized by company management for internal decision-making 
D)  Required to withdraw from future-year engagements, but may complete the current-year assignment as long as the departure from GAAP is adequately disclosed 
A)  Not allowed to issue an audit report concerning the statements 
B)  Required to disclose an estimate of the approximate financial impact that the departure from GAAP had on the financial statements 
C)  Allowed to complete the current-year engagement only if the financial statements are utilized by company management for internal decision-making 
D)  Required to withdraw from future-year engagements, but may complete the current-year assignment as long as the departure from GAAP is adequately disclosed

Question 10

The "moral character" requirement, as expressed in the Uniform Accountancy Act's Model Rules:

Accepted Answer

A)  Is limited to acts of dishonesty or deceit that evidence unfitness to carry out the duties of the accounting profession 
B)  Is limited to acts of misconduct that constitute misdemeanors 
C)  Is limited to acts of misconduct that constitute felonies 
D)  Includes all acts of dishonesty or deceit that evidence unfitness to practice accounting and any felony, whether or not it relates to the practice of accounting 
A)  Is limited to acts of dishonesty or deceit that evidence unfitness to carry out the duties of the accounting profession 
B)  Is limited to acts of misconduct that constitute misdemeanors 
C)  Is limited to acts of misconduct that constitute felonies 
D)  Includes all acts of dishonesty or deceit that evidence unfitness to practice accounting and any felony, whether or not it relates to the practice of accounting

What are the advantages of preparing financial statements in accordance with GAAP? What are the disadvantages?

Which of the following acts is clearly discreditable?

Which of the following is most likely to be considered "material," even if the amounts involved are small?

The judge's decision in the "Continental Vending" court case:

When unaudited financial statements prepared on a basis that does not conform to GAAP are disseminated by a CPA, the CPA should:

Preparing financial statements for an unincorporated business on a basis that does not comply with GAAP usually will result in:

What acts are expressly identified as discreditable by the AICPA's Code of Professional Conduct?

The Accounting Principles Rule states that financial statements:

If financial statements contain a departure from GAAP, a CPA is:

The "moral character" requirement, as expressed in the Uniform Accountancy Act's Model Rules:

Introduction to Ethics

Ethical Principles and Reasoning

The Core Philosophies

Virtue, Justice, and Social Responsibility

Why We Cheat

Greed, Corruption, and Collusion

Fraud and Earnings Management

Confidentiality

Independence and Moral Seduction

Conflicts of Interest

Duties As a Whistleblower

Duties of Public-Company Auditors: the Sarbanesoxley Act

Duties of Tax Professionals

Duties of Fiduciaries: Financial Planners, Trustees, and Executors

Duties in the Accounting Workplace Online Only

Filters

Exam 8: Discreditable Acts: Discrimination, Deceit, and Disclosure

What are the advantages of preparing financial statements in accordance with GAAP? What are the disadvantages?

Which of the following acts is clearly discreditable?

Which of the following is most likely to be considered "material," even if the amounts involved are small?

The judge's decision in the "Continental Vending" court case:

When unaudited financial statements prepared on a basis that does not conform to GAAP are disseminated by a CPA, the CPA should:

Preparing financial statements for an unincorporated business on a basis that does not comply with GAAP usually will result in:

What acts are expressly identified as discreditable by the AICPA's Code of Professional Conduct?

The Accounting Principles Rule states that financial statements:

If financial statements contain a departure from GAAP, a CPA is:

The "moral character" requirement, as expressed in the Uniform Accountancy Act's Model Rules:

Introduction to Ethics

Ethical Principles and Reasoning

The Core Philosophies

Virtue, Justice, and Social Responsibility

Why We Cheat

Greed, Corruption, and Collusion

Fraud and Earnings Management

Confidentiality

Independence and Moral Seduction

Conflicts of Interest

Duties As a Whistleblower

Duties of Public-Company Auditors: the Sarbanesoxley Act

Duties of Tax Professionals

Duties of Fiduciaries: Financial Planners, Trustees, and Executors

Duties in the Accounting Workplace Online Only

Filters