Exam 4: Professional Judgment and Ethics

Describe an ethical dilemma that an auditor or an accountant might face in his or her business career. Then illustrate how the auditor or accountant might use the five-step approach presented in Chapter 4 to resolve the dilemma. Be specific.

PA has been asked to accept the audit engagement of BarneyBlues Corporation. PA sent a letter to the predecessor auditor asking whether there was any reason why he should not accept the engagement. Assuming that the prior year audit went smoothly, what would be an appropriate response by the predecessor auditor?

Which of the following is the best example of an intimidation threat? Management

Society has attached a special meaning to the term professional. A professional is

Xiao, PA, is the auditor of Minkle Credit Union, a medium-sized credit union. Xiao has prepared a management letter with several serious control weaknesses. Management agrees with the facts, but does not want to present the letter with the weaknesses to the audit committee or the board of directors. Management has implied that they will request a change of auditors if your firm presents the management letter to the board. Required: Discuss the actions that Xiao should take. Justify your response.

The underlying reason for a high level of professional conduct, such as exemplified in a code of conduct, for any profession is

As a member of a professional accounting association, when considering the applicability of the rules of professional conduct, a PA would be responsible for compliance by

An intimidation threat occurs when

Which one of the following forms of advertisement would violate solicitation rules? PA

How do quality control processes for the financial statement audit process incorporate consideration of legislation that affects the client?

To ensure that employees remain independent, an audit firm should

What are the common judgement traps and how can they be avoided?