Question 1

The AICPA has interpreted Rule 301,Confidential Client Information,to explicitly allow a CPA to divulge confidential client information to

Accepted Answer

A)  The SEC. 
B)  The U.S. Department of Justice. 
C)  The AICPA Professional Ethics Division. 
D)  The Federal Trade Commission. 
A)  The SEC. 
B)  The U.S. Department of Justice. 
C)  The AICPA Professional Ethics Division. 
D)  The Federal Trade Commission.

Question 2

A member in public practice can receive a contingent fee for

Accepted Answer

A)  An audit or review of a financial statement. 
B)  A compilation of a financial statement. 
C)  An examination of prospective financial statements. 
D)  Representing a client in an IRS tax audit. 
A)  An audit or review of a financial statement. 
B)  A compilation of a financial statement. 
C)  An examination of prospective financial statements. 
D)  Representing a client in an IRS tax audit.

Question 3

CPAs are not permitted to advertise except in a few instances.

Accepted Answer

A) True 
 B)False

Question 4

The ____________________ principle directs a decision maker to act according to the requirements of an ethical rule.

Accepted Answer

The answer of The ____________________ principle directs a decision maker...

Question 5

Financial statement audit services are the only engagements that require independence.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following "bodies designated by Council" have been authorized to promulgate accounting principles enforceable under Rule 203 of the AICPA Code of Professional Conduct?

Accepted Answer

A)  Auditing Standards Board. 
B)  Federal Accounting Standards Advisory Board. 
C)  Consulting Services Executive Committee. 
D)  Accounting and Review Services Committee. 
A)  Auditing Standards Board. 
B)  Federal Accounting Standards Advisory Board. 
C)  Consulting Services Executive Committee. 
D)  Accounting and Review Services Committee.

Question 7

According to Rule 203,Accounting Principles,requires the auditor to adhere to official pronouncements except when

Accepted Answer

A)  Complying would violate client confidentiality. 
B)  Pending legislation may change the reporting requirements of the client. 
C)  Adherence to a pronouncement would be misleading. 
D)  It has been established that financial statement users prefer an alternative presentation of information. 
A)  Complying would violate client confidentiality. 
B)  Pending legislation may change the reporting requirements of the client. 
C)  Adherence to a pronouncement would be misleading. 
D)  It has been established that financial statement users prefer an alternative presentation of information.

Question 8

CPA Kara Rambo is the auditor of Ajax Corporation.Her audit independence will not be considered impaired if she

Accepted Answer

A)  Owns $1,000 worth of Ajax stock. 
B)  Has a husband who owns $1,000 worth of Ajax stock. 
C)  Has a sister who is the financial vice president of Ajax. 
D)  Owns $1,000 worth of the stock of Pericles Corporation, which is controlled by Ajax as a result of Ajax's ownership of 40 percent of Pericles' stock, and Pericles contributes 3 percent of the total assets and income in Ajax's financial statements. 
A)  Owns $1,000 worth of Ajax stock. 
B)  Has a husband who owns $1,000 worth of Ajax stock. 
C)  Has a sister who is the financial vice president of Ajax. 
D)  Owns $1,000 worth of the stock of Pericles Corporation, which is controlled by Ajax as a result of Ajax's ownership of 40 percent of Pericles' stock, and Pericles contributes 3 percent of the total assets and income in Ajax's financial statements.

Question 9

Dara & Co.audits Hill Corporation.Ellie is the engagement partner on the audit with an office in Buffalo Grove.Which of the following would not be considered a covered member?

Accepted Answer

A)  Jason, who is a member of the attest engagement team with an office in Elmhurst. 
B)  Adam, who is a tax partner and provided 50 hours of tax service to Hill Company during the year of the audit with an office in Elmhurst. 
C)  Ben, a partner in Dara & Company, with an office in Buffalo Grove. 
D)  Julie, a partner in Dara & Company, with an office in Elmhurst. 
A)  Jason, who is a member of the attest engagement team with an office in Elmhurst. 
B)  Adam, who is a tax partner and provided 50 hours of tax service to Hill Company during the year of the audit with an office in Elmhurst. 
C)  Ben, a partner in Dara & Company, with an office in Buffalo Grove. 
D)  Julie, a partner in Dara & Company, with an office in Elmhurst.

Question 10

Rule 501 on Acts Discreditable to the Profession is often referred to as the ___________________________ of the Code.

Accepted Answer

The answer of Rule 501 on Acts Discreditable to the...

Question 11

Most state boards of accountancy do not

Accepted Answer

A)  Issue licenses to practice accounting. 
B)  Regulate tax practice. 
C)  Limit the attest function to license holders. 
D)  Administer an ethics examination. 
A)  Issue licenses to practice accounting. 
B)  Regulate tax practice. 
C)  Limit the attest function to license holders. 
D)  Administer an ethics examination.

Question 12

In considering general ethics,the primary goal is to arrive at a set of acceptable methods for making ethical decisions.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following sections is not included in the AICPA Rules of Conduct?

Accepted Answer

A)  Responsibilities to Clients. 
B)  Independence, Integrity, and Objectivity. 
C)  Responsibilities to Colleagues. 
D)  General and Technical Standards. 
A)  Responsibilities to Clients. 
B)  Independence, Integrity, and Objectivity. 
C)  Responsibilities to Colleagues. 
D)  General and Technical Standards.

Question 14

If a public accounting firm says it always follows the rule that requires adherence to FASB pronouncements in order to give a standard unqualified auditors' report,it is following a philosophy characterized by

Accepted Answer

A)  The imperative principle in moral philosophy. 
B)  The utilitarian principle in moral philosophy. 
C)  The generalization principle in moral philosophy. 
D)  Reliance on members' collective conscience. 
A)  The imperative principle in moral philosophy. 
B)  The utilitarian principle in moral philosophy. 
C)  The generalization principle in moral philosophy. 
D)  Reliance on members' collective conscience.

Question 15

A CPA can accept a contingent fee for a compilation report to be used by a bank for purposes of granting a loan to the client as long as the CPA discloses a lack of independence in the report.

Accepted Answer

A) True 
 B)False

Question 16

If a CPA refuses a client because there would be a potential violation of the AICPA Code of Professional Conduct,the CPA is following the ethical philosophy of the

Accepted Answer

A)  Imperative principle. 
B)  Utilitarianism principle. 
C)  Generalization principle. 
D)  Moral principle. 
A)  Imperative principle. 
B)  Utilitarianism principle. 
C)  Generalization principle. 
D)  Moral principle.

Question 17

For each of the following cases indicate if the action by a member CPA is a violation of the AICPA Code of Professional Conduct and cite the relevant rule.
A. Disclosed client information to another CPA firm during the discussion of a merger of the two firms
B. Allowed a company to change the way it values inventory to a method that is not GAAP because following GAAP would be misleading
C. Had a new car loan from a bank that is a client when the bank holds the title to the car
D. Based a fee on approval of a bank loan dependent on audited financial statements
E. Did not comply with Government Auditing Standards on a government audit

Accepted Answer

The answer of For each of the following cases indicate...

Question 18

The basic rationale for permitting CPAs to accept commissions is that

Accepted Answer

A)  It does not affect independence in attest functions. 
B)  Professional liability insurance policies permit commission work. 
C)  State boards of accounting permit commissions and contingent fees. 
D)  Other professionals charge commissions in personal financial planning engagements. 
A)  It does not affect independence in attest functions. 
B)  Professional liability insurance policies permit commission work. 
C)  State boards of accounting permit commissions and contingent fees. 
D)  Other professionals charge commissions in personal financial planning engagements.

Question 19

Which of the following is required for a CPA firm to designate itself as "Members of the American Institute of Certified Public Accountants" on its letterhead?

Accepted Answer

A)  All owners must be members. 
B)  The owners whose names appear in the firm name must be members. 
C)  At least one of the owners must be a member. 
D)  The firm must be a dues-paying member. 
A)  All owners must be members. 
B)  The owners whose names appear in the firm name must be members. 
C)  At least one of the owners must be a member. 
D)  The firm must be a dues-paying member.

Question 20

Which of the following is true if an auditor performs nonaudit services for a government entity?

Accepted Answer

A)  The scope of the audit must be reduced so that the auditor does not audit the area for which the nonaudit work was performed. 
B)  The auditor is prohibited from providing nonaudit work in areas directly related to the production of accounting information. 
C)  The senior members of the government entity must document their review of the nonaudit service and indicate why it is appropriate for the auditors to perform this service. 
D)  The scope of the audit cannot be reduced because the nonaudit work was performed by the public accounting firm. 
A)  The scope of the audit must be reduced so that the auditor does not audit the area for which the nonaudit work was performed. 
B)  The auditor is prohibited from providing nonaudit work in areas directly related to the production of accounting information. 
C)  The senior members of the government entity must document their review of the nonaudit service and indicate why it is appropriate for the auditors to perform this service. 
D)  The scope of the audit cannot be reduced because the nonaudit work was performed by the public accounting firm.

The AICPA has interpreted Rule 301,Confidential Client Information,to explicitly allow a CPA to divulge confidential client information to

A member in public practice can receive a contingent fee for

CPAs are not permitted to advertise except in a few instances.

The ____________________ principle directs a decision maker to act according to the requirements of an ethical rule.

Financial statement audit services are the only engagements that require independence.

Which of the following "bodies designated by Council" have been authorized to promulgate accounting principles enforceable under Rule 203 of the AICPA Code of Professional Conduct?

According to Rule 203,Accounting Principles,requires the auditor to adhere to official pronouncements except when

CPA Kara Rambo is the auditor of Ajax Corporation.Her audit independence will not be considered impaired if she

Dara & Co.audits Hill Corporation.Ellie is the engagement partner on the audit with an office in Buffalo Grove.Which of the following would not be considered a covered member?

Rule 501 on Acts Discreditable to the Profession is often referred to as the ___________________________ of the Code.

Most state boards of accountancy do not

In considering general ethics,the primary goal is to arrive at a set of acceptable methods for making ethical decisions.

Which of the following sections is not included in the AICPA Rules of Conduct?

If a public accounting firm says it always follows the rule that requires adherence to FASB pronouncements in order to give a standard unqualified auditors' report,it is following a philosophy characterized by

A CPA can accept a contingent fee for a compilation report to be used by a bank for purposes of granting a loan to the client as long as the CPA discloses a lack of independence in the report.

If a CPA refuses a client because there would be a potential violation of the AICPA Code of Professional Conduct,the CPA is following the ethical philosophy of the

The basic rationale for permitting CPAs to accept commissions is that

Which of the following is required for a CPA firm to designate itself as "Members of the American Institute of Certified Public Accountants" on its letterhead?

Which of the following is true if an auditor performs nonaudit services for a government entity?

Auditing and Assurance Services

Professional Standards

Engagement Planning

Management Fraud and Audit Risk

Risk Assessment: Internal Control Evaluation

Employee Fraud and the Audit of Cash

Revenue and Collection Cycle

Acquisition and Expenditure Cycle

Production Cycle

Finance and Investment Cycle

Completing the Audit

Reports on Audited Financial Statements

Other Public Accounting Services

Legal Liability

Internal Governmental and Fraud Audits

Overview of Sampling

Attributes Sampling

Variables Sampling

Auditing in a Computerized Environment

Filters

Exam 14: Professional Ethics

The AICPA has interpreted Rule 301,Confidential Client Information,to explicitly allow a CPA to divulge confidential client information to

A member in public practice can receive a contingent fee for

CPAs are not permitted to advertise except in a few instances.

The ____________________ principle directs a decision maker to act according to the requirements of an ethical rule.

Financial statement audit services are the only engagements that require independence.

Which of the following "bodies designated by Council" have been authorized to promulgate accounting principles enforceable under Rule 203 of the AICPA Code of Professional Conduct?

According to Rule 203,Accounting Principles,requires the auditor to adhere to official pronouncements except when

CPA Kara Rambo is the auditor of Ajax Corporation.Her audit independence will not be considered impaired if she

Dara & Co.audits Hill Corporation.Ellie is the engagement partner on the audit with an office in Buffalo Grove.Which of the following would not be considered a covered member?

Rule 501 on Acts Discreditable to the Profession is often referred to as the ___________________________ of the Code.

Most state boards of accountancy do not

In considering general ethics,the primary goal is to arrive at a set of acceptable methods for making ethical decisions.

Which of the following sections is not included in the AICPA Rules of Conduct?

If a public accounting firm says it always follows the rule that requires adherence to FASB pronouncements in order to give a standard unqualified auditors' report,it is following a philosophy characterized by

A CPA can accept a contingent fee for a compilation report to be used by a bank for purposes of granting a loan to the client as long as the CPA discloses a lack of independence in the report.

If a CPA refuses a client because there would be a potential violation of the AICPA Code of Professional Conduct,the CPA is following the ethical philosophy of the

The basic rationale for permitting CPAs to accept commissions is that

Which of the following is required for a CPA firm to designate itself as "Members of the American Institute of Certified Public Accountants" on its letterhead?

Which of the following is true if an auditor performs nonaudit services for a government entity?

Auditing and Assurance Services

Professional Standards

Engagement Planning

Management Fraud and Audit Risk

Risk Assessment: Internal Control Evaluation

Employee Fraud and the Audit of Cash

Revenue and Collection Cycle

Acquisition and Expenditure Cycle

Production Cycle

Finance and Investment Cycle

Completing the Audit

Reports on Audited Financial Statements

Other Public Accounting Services

Legal Liability

Internal Governmental and Fraud Audits

Overview of Sampling

Attributes Sampling

Variables Sampling

Auditing in a Computerized Environment

Filters