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

Rule 201 - General Standards, of the AICPA Code of Professional Conduct does not include which of the following factors?

(Multiple Choice)

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Question 61

A member of the AICPA must safeguard the confidentiality of client information. Which of the following is not a valid reason to disclose information to non-clients?

(Multiple Choice)

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Question 62

Independence. Discuss what audit independence is and why it is important to the audit firm and the profession. What are some major threats to audit firm independence and what are some of the steps that audit firms and the profession have taken in addressing those threats?

(Essay)

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Question 63

In federal lawsuits, Congress has limited the extent of joint and several liability damages to the actual percentage of responsibility if auditors are found liable for less than 75% of damages.

(True/False)

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Question 64

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

(True/False)

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Question 65

Communication between an auditor and an audit client is deemed to be privileged communication in most states.

(True/False)

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Question 66

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.

(True/False)

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Question 67

Non-audit services prohibited or permitted under Sarbanes-Oxley. Harry Rawlins CPAs, are engaged by DK, Inc., a public company to perform the year-end audit. A.Discuss the types of services that Harry Rawlins CPAs will not be able to perform for DK under the Sarbanes-Oxley Act of 2002. B.Under what circumstances may Harry Rawlins CPAs perform certain non-audit services for DK, Inc. under Sarbanes-Oxley Act of 2002?

(Essay)

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Question 68

Rights theory focuses on evaluating actions in terms of the fundamental rights of the parties involved.

(True/False)

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Question 69

Which of the following represents a situation in which an auditor is independent of its client?

(Multiple Choice)

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Question 70

The expectations gap related to shareholders' beliefs about recovery of losses on investments serves as a deterrent to lawsuits filed against audit firms.

(True/False)

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Question 71

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

(Multiple Choice)

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Question 72

The auditor is permitted to violate the confidentiality rule in providing relevant information to an inquiry by a major shareholder of the client.

(True/False)

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Question 73

Which of the following is not one of the reasons for increased litigation related to audits?

(Multiple Choice)

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Question 74

A contingency fee is a situation in which no fee will be charged unless a specified finding or result is attained.

(True/False)

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Question 75

Which of the following is a cause of action against the auditor for breach of contract?

(Multiple Choice)

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Question 76

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

(True/False)

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Question 77

Which of the following concepts represents the most expansive aspect of liability for auditors?

(Multiple Choice)

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Question 78

An auditor who is professionally skeptical will do which of the following?

(Multiple Choice)

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Question 79

Independence in mental attitude is required of auditor on all audit engagements. Which statement best describes the highest goal for independence?

(Multiple Choice)

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Question 80

Showing 61 - 80 of 88

Rule 201 - General Standards, of the AICPA Code of Professional Conduct does not include which of the following factors?

A member of the AICPA must safeguard the confidentiality of client information. Which of the following is not a valid reason to disclose information to non-clients?

Independence. Discuss what audit independence is and why it is important to the audit firm and the profession. What are some major threats to audit firm independence and what are some of the steps that audit firms and the profession have taken in addressing those threats?

In federal lawsuits, Congress has limited the extent of joint and several liability damages to the actual percentage of responsibility if auditors are found liable for less than 75% of damages.

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

Communication between an auditor and an audit client is deemed to be privileged communication in most states.

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.

Rights theory focuses on evaluating actions in terms of the fundamental rights of the parties involved.

Which of the following represents a situation in which an auditor is independent of its client?

The expectations gap related to shareholders' beliefs about recovery of losses on investments serves as a deterrent to lawsuits filed against audit firms.

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

The auditor is permitted to violate the confidentiality rule in providing relevant information to an inquiry by a major shareholder of the client.

Which of the following is not one of the reasons for increased litigation related to audits?

A contingency fee is a situation in which no fee will be charged unless a specified finding or result is attained.

Which of the following is a cause of action against the auditor for breach of contract?

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

Which of the following concepts represents the most expansive aspect of liability for auditors?

An auditor who is professionally skeptical will do which of the following?

Independence in mental attitude is required of auditor on all audit engagements. Which statement best describes the highest goal for independence?

Auditing: Integral to the Economy

The Auditors Responsibilities Regarding Fraud and Mechanisms to Address Fraud: Regulation and Corporate Governance

Internal Control Over Financial Reporting: Responsibilities of Management and 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

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