Exam 5: Ethics and the Audit Profession

Interpretations of Independence Rule 101 prohibit covered members from owning any stock or other direct investment in audit clients.Covered members would include which of the following?

When a member observes the profession's technical and ethical standards and strives to continually improve her competence and quality of services,she is exercising:

Which one of the following statements is false?

Which of the following is(are)true concerning the Ethical Principles of the Code of Professional Conduct? I.They identify ideal conduct. II.They are general ideals and are not enforceable.

Four of the six Ethical Principles in the AICPA's Code of Professional Conduct are equally applicable to all members of the AICPA.Which of the following principles applies only to members in public practice?

Interpretations of rules of conduct in the Code of Professional Conduct are not officially enforceable and practitioners need not justify departure from them.

Which of the following would be considered a violation of the AICPA Code of Conduct?

Describe the methods used by the AICPA and State Boards of Accountancy to enforce the rules of conduct.

Which of the following statements is true? The CPA firm will lose its independence if:

Under Rule 505,Form of Organization and Name,a CPA firm may not designate itself as "Members of the American Institute of Certified Public Accountants" unless a majority of its owners are members of the Institute.

For which of the following professional services must CPAs be independent?

Imprisonment for a period of six months or longer will result in automatic expulsion from the AICPA.

CPAs may provide bookkeeping services to their private company audit clients,but there are a number of conditions that must be met if the auditor is to maintain independence.Which of the following conditions is not necessary?

The AICPA Code of Professional Conduct permits the auditor to perform a wide variety of non-audit services for audit clients.

All owners of a CPA firm must be CPAs who are qualified to practice.

In the AICPA Code of Professional Conduct,the sixth principle of professional conduct,entitled "Scope and Nature of Services," applies to members of the AICPA who work in public practice,business,government,or education.

Expulsion from the AICPA for failing to follow the rules of conduct is,by itself,sufficient to prevent a CPA from practicing public accounting.

The audit committee of a private company need not approve all non-audit services provided by the company's financial statement auditor.

CPAs are prohibited from which of the following forms of advertising?

A public company may obtain internal audit services from their financial statement auditor if it is approved by the company's audit committee.