Question 1

As compared to the AICPA Code of Professional Conduct,IFAC's International Code of Ethics for Professional Accountants:

Accepted Answer

A)  Applies to more types of services.
B)  Has more specific restrictions.
C)  Has less specific restrictions.
D)  Is less conceptual. C

Question 2

The AICPA Code of Professional Conduct would be violated if a CPA accepted a fee for services and the fee was:

Accepted Answer

A)  Fixed by a public authority.
B)  Based on a price quotation submitted in competitive bidding.
C)  Based on performing work relating to judicial proceedings.
D)  Payable if the audit of the financial statements led to a loan. D

Question 3

If a CPA violates the AICPA Code of Professional Conduct,the AICPA Trial Board may do all of the following,except:

Accepted Answer

A)  Admonish the offending member.
B)  Suspend the offending member.
C)  Expel the offending member.
D)  Revoke the offending member's CPA certificate. D

Question 4

Pickens and Perkins,CPAs,decide to incorporate their practice of accountancy.According to the AICPA Code of Professional Conduct,shares in the corporation can be issued:

Accepted Answer

A)  Only to persons qualified to practice public accounting.
B)  Only to employees and officers of the firm.
C)  Only to persons qualified to practice as CPAs and members of their immediate families.
D)  To the general public.

Question 5

The AICPA Code of Professional Conduct states that a CPA shall not disclose any confidential information obtained in the course of a professional engagement except with the consent of the client.This rule should be understood to preclude a CPA from responding to an inquiry made by:

Accepted Answer

A)  The trial board of the AICPA.
B)  An investigative body of a state CPA society.
C)  A CPA-shareholder of the client corporation.
D)  An AICPA voluntary quality review body.

Question 6

Independence is required of a CPA performing:

Accepted Answer

A)  Audits, but not any other professional services.
B)  All attestation services, but not other professional services.
C)  All attestation and tax services, but not other professional services.
D)  All professional services.

Question 7

Competence as a certified public accountant includes all of the following except:

Accepted Answer

A)  Having the technical qualifications to perform an engagement.
B)  Possessing the ability to supervise and to evaluate the quality of staff work.
C)  Warranting the infallibility of the work performed.
D)  Consulting others if additional technical information is needed.

Question 8

Which of the following types of employees must be independent of an audit client?

Accepted Answer

A)  Staff assistants assigned to the engagement.
B)  Senior auditors assigned to the office that performs the audit.
C)  Managers assigned to an office that does not participate in the engagement.
D)  All firm professionals, regardless of their position.

Question 9

If the AICPA Code of Professional Conduct does not specifically address a threat to auditor independence the auditor should:

Accepted Answer

A)  Conclude that the threat is not significant unless proven so.
B)  Conclude that the threat results in a lack of independence unless it can be shown that no impairment of independence occurs.
C)  Consider the threat from the perspective of a reasonable an informed third party who has knowledge of all the relevant information.
D)  Consult the Statements on Auditing Standards for guidance.

Question 10

CPAs are allowed to advertise under the Rules of the AICPA Code of Professional Conduct.
a.List the general guidelines regarding the nature of acceptable advertising.
b.Describe two specific forms of unacceptable advertising.
a.Advertising is acceptable if it is not false,misleading,or deceptive.
b.Unacceptable forms of advertising include advertising that (only two required):
· Creates unjustified expectations of favorable results.
· Indicates an ability to influence a court or other official body.
· Misstates professional qualifications.

Accepted Answer

The answer of CPAs are allowed to advertise under the...

Question 11

Which of the following organizations issue international ethics standards for auditors?

Accepted Answer

A)  The AICPA.
B)  The IFAC.
C)  The SEC.
D)  The FASB.

Question 12

The AICPA Code of Professional Conduct derives its authority from the Bylaws of the AICPA.

Accepted Answer

A) True 
 B)False

Question 13

A CPA firm may not designate itself as "members of the AICPA" unless:

Accepted Answer

A)  All of its partners or shareholders are members of the Institute.
B)  All of its professional staff are members of the Institute.
C)  A majority of its professional staff are members of the Institute.
D)  At least one partner or shareholder is a member of the Institute.

Question 14

Auditors are periodically punished for holding an investment in a client.This violates which ethical rule?

Accepted Answer

A)  Integrity.
B)  Independence.
C)  Non compliance with GAAP.
D)  Confidentiality.

Question 15

Contingency fee based pricing of accounting services is:

Accepted Answer

A)  Always strictly prohibited in public accounting practice.
B)  Never restricted in public accounting practice.
C)  Prohibited for clients for whom attestation services are provided.
D)  Considered an act discreditable to the profession.

Question 16

Which of the following attributes is more closely associated with attestation services performed by a CPA firm than with other lines of professional work?

Accepted Answer

A)  Integrity.
B)  Competence
C)  Independence
D)  Keeping informed on current professional developments.

Question 17

The following is a list of circumstances that might be faced by a public accounting firm.Select the rule violated of the AICPA Code of Professional Conduct in the second column.If no rule is violated select 10--no violation (this may be used once,more than once,or not at all).Rules 1 through 9 may be used either once,or not at all.
1.A CPA does not follow generally accepted auditing standards in the audit of a nonpublic US company
2.A CPA discloses information about a client because the information was subpoenaed
3.A CPA robs a bank
4.A CPA charges an audit fee that depends on the amount of credit the client obtains
5.A CPA advertises in a local newspaper
6.A client knowingly issues financial statements that inappropriately and materially depart from an FASB standard
7.A CPA and the president of an audit client both have an immaterial joint investment in another company.The CPA firm provides no services for the other company
8.In preparing a tax return,a CPA takes a deduction at the client's request that the CPA believes is not justified
9.The dependent-son of a partner in a CPA firm owns ten shares of stock in an audit client
10.A CPA owns 100 shares in a consulting client for which the firm provides no attest services

Accepted Answer

The answer of The following is a list of circumstances...

Question 18

When an accountant is not independent,the accountant is precluded from issuing a:

Accepted Answer

A)  Compilation report.
B)  Review report.
C)  Management advisory report.
D)  Tax planning report.

Question 19

CPAs can advertise the fees only for their nonattest services.

Accepted Answer

A) True 
 B)False

Question 20

The Rules portion of the AICPA Code of Professional Conduct must be followed by only those members in private practice.

Accepted Answer

A) True 
 B)False

Exam 3: Professional Ethics

As compared to the AICPA Code of Professional Conduct,IFAC's International Code of Ethics for Professional Accountants:

The AICPA Code of Professional Conduct would be violated if a CPA accepted a fee for services and the fee was:

If a CPA violates the AICPA Code of Professional Conduct,the AICPA Trial Board may do all of the following,except:

Pickens and Perkins,CPAs,decide to incorporate their practice of accountancy.According to the AICPA Code of Professional Conduct,shares in the corporation can be issued:

The AICPA Code of Professional Conduct states that a CPA shall not disclose any confidential information obtained in the course of a professional engagement except with the consent of the client.This rule should be understood to preclude a CPA from responding to an inquiry made by:

Independence is required of a CPA performing:

Competence as a certified public accountant includes all of the following except:

Which of the following types of employees must be independent of an audit client?

If the AICPA Code of Professional Conduct does not specifically address a threat to auditor independence the auditor should:

Which of the following organizations issue international ethics standards for auditors?

The AICPA Code of Professional Conduct derives its authority from the Bylaws of the AICPA.

A CPA firm may not designate itself as "members of the AICPA" unless:

Auditors are periodically punished for holding an investment in a client.This violates which ethical rule?

Contingency fee based pricing of accounting services is:

Which of the following attributes is more closely associated with attestation services performed by a CPA firm than with other lines of professional work?

When an accountant is not independent,the accountant is precluded from issuing a:

CPAs can advertise the fees only for their nonattest services.

The Rules portion of the AICPA Code of Professional Conduct must be followed by only those members in private practice.