Question 1

Which of the following values is NOT necessary for an accounting professional?

Accepted Answer

A)  honesty 
B)  integrity 
C)  objectivity 
D)  a primary commitment to self-interest 
E)  All of these are necessary. 
A)  honesty 
B)  integrity 
C)  objectivity 
D)  a primary commitment to self-interest 
E)  All of these are necessary. D

Question 2

The recommendation of appointment and review of external auditors by the audit committee is an example of

Accepted Answer

A)  safeguards reducing the risk of conflict of interest created by the profession, legislation, or regulation. 
B)  safeguards reducing the risk of conflict of interest between an auditor and management. 
C)  safeguards reducing the risk of conflict of interest within a professional accounting firm's own systems and procedures. 
D)  safeguards reducing the risk of conflict of interest created by the profession, legislation, or regulation, and safeguards reducing the risk of conflict of interest within a professional accounting firm's own systems and procedures. 
E)  All of these are correct. 
A)  safeguards reducing the risk of conflict of interest created by the profession, legislation, or regulation. 
B)  safeguards reducing the risk of conflict of interest between an auditor and management. 
C)  safeguards reducing the risk of conflict of interest within a professional accounting firm's own systems and procedures. 
D)  safeguards reducing the risk of conflict of interest created by the profession, legislation, or regulation, and safeguards reducing the risk of conflict of interest within a professional accounting firm's own systems and procedures. 
E)  All of these are correct. B

Question 3

If a professional accountant is billing an audit client for more hours than those actually worked, he will be violating which of the following fundamental principles?

Accepted Answer

A)  objectivity 
B)  professional due care 
C)  integrity 
D)  confidentiality 
E)  All of these are correct. 
A)  objectivity 
B)  professional due care 
C)  integrity 
D)  confidentiality 
E)  All of these are correct. C

Question 4

The external review of an audit firm's quality control system is an example of

Accepted Answer

A)  safeguards reducing the risk of conflict of interest within the audit profession. 
B)  safeguards reducing the risk of conflict of interest within a client. 
C)  safeguards reducing the risk of conflict of interest within a professional accounting firm. 
D)  safeguards reducing the risk of conflict of interest within the audit profession and within a professional accounting firm. 
E)  All of these are correct. 
A)  safeguards reducing the risk of conflict of interest within the audit profession. 
B)  safeguards reducing the risk of conflict of interest within a client. 
C)  safeguards reducing the risk of conflict of interest within a professional accounting firm. 
D)  safeguards reducing the risk of conflict of interest within the audit profession and within a professional accounting firm. 
E)  All of these are correct.

Question 5

Which organization can issue auditing standards in the United States?

Accepted Answer

A)  AICPA 
B)  FASB 
C)  SEC 
D)  PCAOB 
E)  All of these are correct. 
A)  AICPA 
B)  FASB 
C)  SEC 
D)  PCAOB 
E)  All of these are correct.

Question 6

A professional accountant has been the partner in charge of a particular audit client for the past eight years. This situation could result in which of the following threats to professional independence?

Accepted Answer

A)  self-review 
B)  intimidation 
C)  advocacy 
D)  familiarity 
E)  None of these are correct. 
A)  self-review 
B)  intimidation 
C)  advocacy 
D)  familiarity 
E)  None of these are correct.

Question 7

Using partners who do not report to audit partners for the provision of non-assurance services to an assurance client would be an example of

Accepted Answer

A)  safeguards reducing the risk of conflict of interest created by the profession, legislation, or regulation. 
B)  safeguards reducing the risk of conflict of interest within a client. 
C)  safeguards reducing the risk of conflict of interest within a professional accounting firm. 
D)  safeguards reducing the risk of conflict of interest created by the profession, legislation, or regulation, and safeguards reducing the risk of conflict of interest within a professional accounting firm. 
E)  All of these are correct. 
A)  safeguards reducing the risk of conflict of interest created by the profession, legislation, or regulation. 
B)  safeguards reducing the risk of conflict of interest within a client. 
C)  safeguards reducing the risk of conflict of interest within a professional accounting firm. 
D)  safeguards reducing the risk of conflict of interest created by the profession, legislation, or regulation, and safeguards reducing the risk of conflict of interest within a professional accounting firm. 
E)  All of these are correct.

Question 8

If a professional accountant is auditing a public company and she receives company shares as payment for her audit services, she will be violating which of the following fundamental principles?

Accepted Answer

A)  integrity 
B)  objectivity 
C)  professional due care 
D)  confidentiality 
E)  All of these are correct. 
A)  integrity 
B)  objectivity 
C)  professional due care 
D)  confidentiality 
E)  All of these are correct.

Question 9

The adoption of which of following measures would reduce the expectations gap and lessen public misunderstanding of the auditor's role?

Accepted Answer

A)  publishing a statement of management responsibility 
B)  the auditor reporting annually to the audit committee 
C)  expanding the audit report to clarify the auditor's role and the level of assurance 
D)  publishing a statement of management responsibility, and the auditor reporting annually to the audit committee 
E)  publishing a statement of management responsibility, and expanding the audit report to clarify the auditor's role and the level of assurance 
A)  publishing a statement of management responsibility 
B)  the auditor reporting annually to the audit committee 
C)  expanding the audit report to clarify the auditor's role and the level of assurance 
D)  publishing a statement of management responsibility, and the auditor reporting annually to the audit committee 
E)  publishing a statement of management responsibility, and expanding the audit report to clarify the auditor's role and the level of assurance

Question 10

Which of the following is NOT a fundamental principle in codes of conduct for professional accountants?

Accepted Answer

A)  act in the client's best interest 
B)  objectivity and independence 
C)  maintain the good reputation of the profession 
D)  maintain confidentiality 
E)  not to be associated with misleading information 
A)  act in the client's best interest 
B)  objectivity and independence 
C)  maintain the good reputation of the profession 
D)  maintain confidentiality 
E)  not to be associated with misleading information

Question 11

Which of following duties is essential to maintaining a fiduciary relationship in the accounting profession?

Accepted Answer

A)  development and maintenance of required knowledge and skills 
B)  maintenance of trust 
C)  maintenance of an acceptable personal reputation 
D)  development and maintenance of required knowledge and skills, and maintenance of trust 
E)  All of these are correct. 
A)  development and maintenance of required knowledge and skills 
B)  maintenance of trust 
C)  maintenance of an acceptable personal reputation 
D)  development and maintenance of required knowledge and skills, and maintenance of trust 
E)  All of these are correct.

Question 12

Which organization issues auditing standards, carries out inspections of public accounting firms auditing U.S. public clients, and imposes sanctions when applicable?

Accepted Answer

A)  CPAB 
B)  PCAOB 
C)  SEC 
D)  FASB 
E)  AICPA 
A)  CPAB 
B)  PCAOB 
C)  SEC 
D)  FASB 
E)  AICPA

Question 13

A professional accounting firm has several audit and tax clients; however, a single client represents 40% of the firm's revenue. This situation could result in which of the following threats to professional independence?

Accepted Answer

A)  self-review 
B)  intimidation 
C)  advocacy 
D)  familiarity 
E)  self-interest 
A)  self-review 
B)  intimidation 
C)  advocacy 
D)  familiarity 
E)  self-interest

Question 14

A professional accountant is auditing client A and providing consulting services to client B. Both clients are in the same industry. If the professional accountant uses specific information from client A's audit to prepare a business plan for client B, he will be violating which of the following fundamental principles?

Accepted Answer

A)  integrity 
B)  objectivity 
C)  professional due care 
D)  confidentiality 
E)  All of these are correct. 
A)  integrity 
B)  objectivity 
C)  professional due care 
D)  confidentiality 
E)  All of these are correct.

Question 15

A new audit client was taken on by a professional accountant's firm. The fee for this client's audit engagement is significantly lower than that charged by the prior accountants. This situation could result in which of the following threats to professional independence?

Accepted Answer

A)  self-review 
B)  intimidation 
C)  advocacy 
D)  familiarity 
E)  None of these are correct. 
A)  self-review 
B)  intimidation 
C)  advocacy 
D)  familiarity 
E)  None of these are correct.

Question 16

According to Kohlberg, adherence to moral codes or to codes of law and order is a motive for doing right at which stage of moral reasoning?

Accepted Answer

A)  pre-conventional 
B)  conventional 
C)  post-conventional 
D)  autonomous 
E)  principled 
A)  pre-conventional 
B)  conventional 
C)  post-conventional 
D)  autonomous 
E)  principled

Question 17

Which organization is developing an international code of conduct for professional accountants?

Accepted Answer

A)  International Accounting Standards Board 
B)  European Federation of Accountants 
C)  Financial Accounting Standards Board 
D)  Public Accounting Oversight Board 
E)  International Federation of Accountants 
A)  International Accounting Standards Board 
B)  European Federation of Accountants 
C)  Financial Accounting Standards Board 
D)  Public Accounting Oversight Board 
E)  International Federation of Accountants

Question 18

Professional accountants, in their fiduciary role, owe primary loyalty to

Accepted Answer

A)  the accounting profession. 
B)  the client. 
C)  the public interest. 
D)  government regulations. 
E)  All of these are correct. 
A)  the accounting profession. 
B)  the client. 
C)  the public interest. 
D)  government regulations. 
E)  All of these are correct.

Question 19

Which of the following elements are essential features of a profession?

Accepted Answer

A)  extensive training, license or certification, and provision of important services to society 
B)  extensive training, license or certification, and provision of important services to society. 
C)  extensive training, provision of important services to society, and primarily intellectual skills 
D)  license or certification, representation by professional organizations, and autonomy 
E)  license or certification, autonomy, and provision of important services to society 
A)  extensive training, license or certification, and provision of important services to society 
B)  extensive training, license or certification, and provision of important services to society. 
C)  extensive training, provision of important services to society, and primarily intellectual skills 
D)  license or certification, representation by professional organizations, and autonomy 
E)  license or certification, autonomy, and provision of important services to society

Question 20

According to Kohlberg, fear of punishment and authorities is a motive for doing right at which stage of moral reasoning?

Accepted Answer

A)  pre-conventional 
B)  conventional 
C)  post-conventional 
D)  autonomous 
E)  principled 
A)  pre-conventional 
B)  conventional 
C)  post-conventional 
D)  autonomous 
E)  principled

Which of the following values is NOT necessary for an accounting professional?

The recommendation of appointment and review of external auditors by the audit committee is an example of

If a professional accountant is billing an audit client for more hours than those actually worked, he will be violating which of the following fundamental principles?

The external review of an audit firm's quality control system is an example of

Which organization can issue auditing standards in the United States?

A professional accountant has been the partner in charge of a particular audit client for the past eight years. This situation could result in which of the following threats to professional independence?

Using partners who do not report to audit partners for the provision of non-assurance services to an assurance client would be an example of

If a professional accountant is auditing a public company and she receives company shares as payment for her audit services, she will be violating which of the following fundamental principles?

The adoption of which of following measures would reduce the expectations gap and lessen public misunderstanding of the auditor's role?

Which of the following is NOT a fundamental principle in codes of conduct for professional accountants?

Which of following duties is essential to maintaining a fiduciary relationship in the accounting profession?

Which organization issues auditing standards, carries out inspections of public accounting firms auditing U.S. public clients, and imposes sanctions when applicable?

A professional accounting firm has several audit and tax clients; however, a single client represents 40% of the firm's revenue. This situation could result in which of the following threats to professional independence?

A new audit client was taken on by a professional accountant's firm. The fee for this client's audit engagement is significantly lower than that charged by the prior accountants. This situation could result in which of the following threats to professional independence?

According to Kohlberg, adherence to moral codes or to codes of law and order is a motive for doing right at which stage of moral reasoning?

Which organization is developing an international code of conduct for professional accountants?

Professional accountants, in their fiduciary role, owe primary loyalty to

Which of the following elements are essential features of a profession?

According to Kohlberg, fear of punishment and authorities is a motive for doing right at which stage of moral reasoning?

Ethics Expectations.

Ethics & Governance Scandals

Philosophers’ Contributions.

Practical Ethical Decision Making.

Corporate Ethical Governance & Accountability.

Managing Ethics Risks & Opportunities.

Subprime Lending Fiasco Ethics Issues.

Filters

Exam 6: Professional Accounting in the Public Interest

Which of the following values is NOT necessary for an accounting professional?

The recommendation of appointment and review of external auditors by the audit committee is an example of

If a professional accountant is billing an audit client for more hours than those actually worked, he will be violating which of the following fundamental principles?

The external review of an audit firm's quality control system is an example of

Which organization can issue auditing standards in the United States?

A professional accountant has been the partner in charge of a particular audit client for the past eight years. This situation could result in which of the following threats to professional independence?

Using partners who do not report to audit partners for the provision of non-assurance services to an assurance client would be an example of

If a professional accountant is auditing a public company and she receives company shares as payment for her audit services, she will be violating which of the following fundamental principles?

The adoption of which of following measures would reduce the expectations gap and lessen public misunderstanding of the auditor's role?

Which of the following is NOT a fundamental principle in codes of conduct for professional accountants?

Which of following duties is essential to maintaining a fiduciary relationship in the accounting profession?

Which organization issues auditing standards, carries out inspections of public accounting firms auditing U.S. public clients, and imposes sanctions when applicable?

A professional accounting firm has several audit and tax clients; however, a single client represents 40% of the firm's revenue. This situation could result in which of the following threats to professional independence?

A new audit client was taken on by a professional accountant's firm. The fee for this client's audit engagement is significantly lower than that charged by the prior accountants. This situation could result in which of the following threats to professional independence?

According to Kohlberg, adherence to moral codes or to codes of law and order is a motive for doing right at which stage of moral reasoning?

Which organization is developing an international code of conduct for professional accountants?

Professional accountants, in their fiduciary role, owe primary loyalty to

Which of the following elements are essential features of a profession?

According to Kohlberg, fear of punishment and authorities is a motive for doing right at which stage of moral reasoning?

Ethics Expectations.

Ethics & Governance Scandals

Philosophers’ Contributions.

Practical Ethical Decision Making.

Corporate Ethical Governance & Accountability.

Managing Ethics Risks & Opportunities.

Subprime Lending Fiasco Ethics Issues.

Filters