Exam 4: Professional Liability, Auditor Judgment Frameworks, and Professional Responsibilities

Rule 102, Integrity and Objectivity,of the AICPA Professional Code of Conduct, does not apply to a CPA who is a corporate CFO.

Which of the following would be the first form filed with the SEC describing a major change in corporate governance?

Liability concepts developed through court decisions are referred to as statutory law.

Rule 102 on integrity and objectivity only applies to covered members as defined by the AICPA.

The importance of independence. Why is "independence" referred to as the cornerstone of auditing?

Which of the following is not an aspect of Rule 201 of the General Standards of the Code of Professional Conduct?

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. According to the AICPA, why is Julie is considered a covered member for FNBW independence purposes?

What is the purpose of an ethical framework?

Compliance with GAAP was an unsuccessful defense in which of the following court cases?

The Principles of the AICPA Code of Professional Conduct express the accounting profession's recognition of its responsibilities to client management.

The confidentiality between auditor and client is legally equivalent as the confidentiality shared between attorney and client.

The Rules of Conduct govern the performance of CPAs in carrying out their public responsibilities.

Expectations Gap. What is the expectations gap?

Under the AICPA definition, who among the following would not be considered a covered member?

A new staff member on an audit engagement may own stock in that client until the audit report is issued.

Contingent fees are prohibited for any client for which the auditor performs audit services, but are otherwise permitted.

Among immediate family members, whose ownership of client's stock is not considered the same as the covered member's ownership?

Professional Skepticism. Explain why professional skepticism is important in making professional judgments. What are the types of actions that a professionally skeptical auditor will take?

Under Rule 201, what best describes how an AIPCA member should act?

Liability based on federal securities law is known as which type of law?