Question 1

What is the purpose of an ethical framework?

Accepted Answer

A) To provide a defined methodology to solve the ethical problem. 
B) To provide a defined methodology to aid the user in making complex ethical decisions. 
C) To provide a defined program to solve ethical dilemmas. 
D) To provide all of the above. 
A) To provide a defined methodology to solve the ethical problem. 
B) To provide a defined methodology to aid the user in making complex ethical decisions. 
C) To provide a defined program to solve ethical dilemmas. 
D) To provide all of the above.

Question 2

Which one of the following is an example of a conflict of interest for a CPA?

Accepted Answer

A) Performing tax services and a compilation engagement for a client. 
B) Serving as legal counsel and an auditor for a client. 
C) Providing an audit on internal financial controls and financial statements for a client. 
D) Serving as a chief financial officer as an employee and as a member of the board of directors. 
A) Performing tax services and a compilation engagement for a client. 
B) Serving as legal counsel and an auditor for a client. 
C) Providing an audit on internal financial controls and financial statements for a client. 
D) Serving as a chief financial officer as an employee and as a member of the board of directors.

Question 3

What does the AICPA Code of Professional Conduct consists of?

Accepted Answer

A) Principles,Rules of Conduct and Ethics Rulings. 
B) Rules of Conduct,Interpretations and Principles. 
C) Principles,Rules of Conduct and Ethics Rulings 
D) Principles,Rules of Conduct,Interpretations and Ethics Rulings. 
A) Principles,Rules of Conduct and Ethics Rulings. 
B) Rules of Conduct,Interpretations and Principles. 
C) Principles,Rules of Conduct and Ethics Rulings 
D) Principles,Rules of Conduct,Interpretations and Ethics Rulings.

Question 4

An ethical dilemma occurs in a situation in which moral duties or obligations conflict.

Accepted Answer

A) True 
 B)False

Question 5

The Principles of the AICPA Code of Professional Conduct provide a very detailed set of rules that represent a low level of actions.

Accepted Answer

A) True 
 B)False

Question 6

Rule 101 on integrity and objectivity only applies to covered members as defined by the AICPA.

Accepted Answer

A) True 
 B)False

Question 7

Audit reports on financial statements can be signed only by those who are licensed as CPAs by their state board of accountancy

Accepted Answer

A) True 
 B)False

Question 8

Julie Webb,CPA takes out an automobile loan with First National Bank of Wellville (FNBW)while attending the University of Wellville.Julie graduates one year later and is hired as an auditor by Best and Driftwood,LLP.Her first assigned audit engagement is with First National Bank of Wellville,a client of Best and Driftwood.As a new audit assistant,Julie continues to pay her automobile loan payments each month.Which of the following best describes Julie's independence status?

Accepted Answer

A) Impaired because Julie has a direct financial interest in FNBW. 
B) Impaired because Julie has a material indirect financial interest in FNBW. 
C) Not impaired because Julie has an immaterial indirect financial interest in FNBW. 
D) Not impaired because Julie is permitted to take normal loans from FNBW. 
A) Impaired because Julie has a direct financial interest in FNBW. 
B) Impaired because Julie has a material indirect financial interest in FNBW. 
C) Not impaired because Julie has an immaterial indirect financial interest in FNBW. 
D) Not impaired because Julie is permitted to take normal loans from FNBW.

Question 9

According to the framework for professional decision making,the first step in decision-making is to structure the audit problem

Accepted Answer

A) True 
 B)False

Question 10

Under Common Law,liability concepts are developed through court decisions based on negligence,gross negligence,or fraud.

Accepted Answer

A) True 
 B)False

Question 11

A covered member under the AICPA's rules includes individuals on the engagement team,any individual in a position to influence the engagement team,and all professional staff in the office of the engagement.

Accepted Answer

A) True 
 B)False

Question 12

Independence in mental attitude is required of auditor on all audit engagements.What does this independence require?

Accepted Answer

A) A sympathetic attitude towards management. 
B) An attitude of judicial neutrality. 
C) An advocacy attitude towards shareholders. 
D) An immovable neutrality regardless of the evidence. 
A) A sympathetic attitude towards management. 
B) An attitude of judicial neutrality. 
C) An advocacy attitude towards shareholders. 
D) An immovable neutrality regardless of the evidence.

Question 13

From whom should a CPA not accept a commission for recommending a product or service?

Accepted Answer

A) A tax client. 
B) An audit client. 
C) A financial-planning client. 
D) A management-services client. 
E) Any of the above. 
A) A tax client. 
B) An audit client. 
C) A financial-planning client. 
D) A management-services client. 
E) Any of the above.

Question 14

An ethical dilemma occurs an ethically correct action may conflict with an individual's immediate self-interest.

Accepted Answer

A) True 
 B)False

Question 15

The Sarbanes Oxley Act requires management to pre-approve any non-audit service by the auditor,including tax services not specifically prohibited.

Accepted Answer

A) True 
 B)False

Question 16

Which of following is not required by Rule 201?

Accepted Answer

A) Professional competency. 
B) Integrity and objectivity. 
C) Planning and supervision. 
D) Gathering sufficient relevant data. 
A) Professional competency. 
B) Integrity and objectivity. 
C) Planning and supervision. 
D) Gathering sufficient relevant data.

Question 17

The expectations gap represents a misunderstanding whereby shareholders mistakenly believe that they are entitled to recover losses on investments for which the auditor provided an unqualified opinion on the financial statements.

Accepted Answer

A) True 
 B)False

Question 18

An individual does not need to agree to uphold the code of professional conduct in order to become licensed as a CPA.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following represents a situation in which auditors may disclose client information to outside parties?

Accepted Answer

A) Bringing working papers to a professional CPA workshop as an example of quality work. 
B) Complying with a validly issued and enforceable subpoena or summons. 
C) Showing the client's bank statement to a neighbor who is a shareholder to emphasize its cash position. 
D) Explaining to the local television news station why the client is likely to miss payroll in the forthcoming periods. 
A) Bringing working papers to a professional CPA workshop as an example of quality work. 
B) Complying with a validly issued and enforceable subpoena or summons. 
C) Showing the client's bank statement to a neighbor who is a shareholder to emphasize its cash position. 
D) Explaining to the local television news station why the client is likely to miss payroll in the forthcoming periods.

Question 20

CPAs are no longer able to practice as a sole proprietorship.

Accepted Answer

A) True 
 B)False

What is the purpose of an ethical framework?

Which one of the following is an example of a conflict of interest for a CPA?

What does the AICPA Code of Professional Conduct consists of?

An ethical dilemma occurs in a situation in which moral duties or obligations conflict.

The Principles of the AICPA Code of Professional Conduct provide a very detailed set of rules that represent a low level of actions.

Rule 101 on integrity and objectivity only applies to covered members as defined by the AICPA.

Audit reports on financial statements can be signed only by those who are licensed as CPAs by their state board of accountancy

According to the framework for professional decision making,the first step in decision-making is to structure the audit problem

Under Common Law,liability concepts are developed through court decisions based on negligence,gross negligence,or fraud.

A covered member under the AICPA's rules includes individuals on the engagement team,any individual in a position to influence the engagement team,and all professional staff in the office of the engagement.

Independence in mental attitude is required of auditor on all audit engagements.What does this independence require?

From whom should a CPA not accept a commission for recommending a product or service?

An ethical dilemma occurs an ethically correct action may conflict with an individual's immediate self-interest.

The Sarbanes Oxley Act requires management to pre-approve any non-audit service by the auditor,including tax services not specifically prohibited.

Which of following is not required by Rule 201?

The expectations gap represents a misunderstanding whereby shareholders mistakenly believe that they are entitled to recover losses on investments for which the auditor provided an unqualified opinion on the financial statements.

An individual does not need to agree to uphold the code of professional conduct in order to become licensed as a CPA.

Which of the following represents a situation in which auditors may disclose client information to outside parties?

CPAs are no longer able to practice as a sole proprietorship.

Auditing: Integral to the Economy

The Risk of Fraud and Mechanisms to Address Fraud: Regulation,corporate Governance,and Audit Quality

Internal Control Over Financial Reporting: Managements Responsibilities and Importance to the External Auditors

Professional Auditing Standards and the Audit Opinion Formulation Process

A Framework for Audit Evidence

Planning the Audit: Identifying and Responding to the Risks of Material Misstatement

Specialized Audit Tools: Sampling and Generalized Audit Software

Auditing the Revenue Cycle

Auditing Cash and Marketable Securities

Auditing Inventory, goods and Services, and Accounts Payable: the Acquisition and Payment Cycle

Auditing Long-Lived Assets: Acquisition, use, impairment, and Disposal

Auditing Debt Obligations and Stockholders Equity Transactions

Activities Required in Completing a Quality Audit

Audit Reports on Financial Statements

Advanced Topics Concerning Complex Auditing Judgments

Other Services Provided by Audit Firms

Filters

Exam 4: Professional Liability and the Need for Quality Auditor Judgments and Ethical Decisions

What is the purpose of an ethical framework?

Which one of the following is an example of a conflict of interest for a CPA?

What does the AICPA Code of Professional Conduct consists of?

An ethical dilemma occurs in a situation in which moral duties or obligations conflict.

The Principles of the AICPA Code of Professional Conduct provide a very detailed set of rules that represent a low level of actions.

Rule 101 on integrity and objectivity only applies to covered members as defined by the AICPA.

Audit reports on financial statements can be signed only by those who are licensed as CPAs by their state board of accountancy

According to the framework for professional decision making,the first step in decision-making is to structure the audit problem

Under Common Law,liability concepts are developed through court decisions based on negligence,gross negligence,or fraud.

A covered member under the AICPA's rules includes individuals on the engagement team,any individual in a position to influence the engagement team,and all professional staff in the office of the engagement.

Independence in mental attitude is required of auditor on all audit engagements.What does this independence require?

From whom should a CPA not accept a commission for recommending a product or service?

An ethical dilemma occurs an ethically correct action may conflict with an individual's immediate self-interest.

The Sarbanes Oxley Act requires management to pre-approve any non-audit service by the auditor,including tax services not specifically prohibited.

Which of following is not required by Rule 201?

The expectations gap represents a misunderstanding whereby shareholders mistakenly believe that they are entitled to recover losses on investments for which the auditor provided an unqualified opinion on the financial statements.

An individual does not need to agree to uphold the code of professional conduct in order to become licensed as a CPA.

Which of the following represents a situation in which auditors may disclose client information to outside parties?

CPAs are no longer able to practice as a sole proprietorship.

Auditing: Integral to the Economy

The Risk of Fraud and Mechanisms to Address Fraud: Regulation,corporate Governance,and Audit Quality

Internal Control Over Financial Reporting: Managements Responsibilities and Importance to the External Auditors

Professional Auditing Standards and the Audit Opinion Formulation Process

A Framework for Audit Evidence

Planning the Audit: Identifying and Responding to the Risks of Material Misstatement

Specialized Audit Tools: Sampling and Generalized Audit Software

Auditing the Revenue Cycle

Auditing Cash and Marketable Securities

Auditing Inventory, goods and Services, and Accounts Payable: the Acquisition and Payment Cycle

Auditing Long-Lived Assets: Acquisition, use, impairment, and Disposal

Auditing Debt Obligations and Stockholders Equity Transactions

Activities Required in Completing a Quality Audit

Audit Reports on Financial Statements

Advanced Topics Concerning Complex Auditing Judgments

Other Services Provided by Audit Firms

Filters