Question 1

The SEC requires companies to disclose fees paid to independent public accounting firms for audit and consulting services in the belief that:

Accepted Answer

A)  Such disclosures will end the practice of auditors performing nonaudit services for audit clients. 
B)  Financial analysts will attribute far less credibility to financial statements audited by public accounting firms that earn substantial nonaudit fees from audit clients. 
C)  An audit firm's consulting on a client's accounting information processing systems essentially impairs audit independence. 
D)  Client directors and financial statement users should consider all aspects related to auditors' independence, and information about fees is important. 
A)  Such disclosures will end the practice of auditors performing nonaudit services for audit clients. 
B)  Financial analysts will attribute far less credibility to financial statements audited by public accounting firms that earn substantial nonaudit fees from audit clients. 
C)  An audit firm's consulting on a client's accounting information processing systems essentially impairs audit independence. 
D)  Client directors and financial statement users should consider all aspects related to auditors' independence, and information about fees is important.

Question 2

Fees based on the number of hours or days worked are ____________________ considered ____________________ on the findings of audit services.

Accepted Answer

The answer of Fees based on the number of hours...

Question 3

Wally Wide is the partner on the audit engagement for First National Bank for its fiscal year-end of January 31,2013.Wally was recently promoted to partner.Based on his increase in income,Wally and his family bought a large home and a new car.First National Bank had the most competitive mortgage rate and auto loan rates,so Wally obtained both his mortgage loan and car loan from First National.Wally paid 20 percent down on the house,received no special rate of interest,and the First National Bank holds the title to the house.Wally traded in his old car and made an additional down payment on the car and financed 60 percent of the price of the car with the bank.Again,Wally paid the prevailing interest rate and the bank holds the title to the car.
Required:
This situation involves possible violations of the AICPA's Code of Professional Conduct.State the rule in question and explain why or why not there is a violation of the code.You need not refer to the rule number but should clearly describe the rule in question.

Accepted Answer

The rule in question is Rule 101-Indepen

Question 4

Members of the AICPA shall comply with standards and interpretations designated by the _________________________.

Accepted Answer

The answer of Members of the AICPA shall comply with...

The SEC requires companies to disclose fees paid to independent public accounting firms for audit and consulting services in the belief that:

Fees based on the number of hours or days worked are considered on the findings of audit services.

Members of the AICPA shall comply with standards and interpretations designated by the _________________________.

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 SEC requires companies to disclose fees paid to independent public accounting firms for audit and consulting services in the belief that:

Fees based on the number of hours or days worked are ____________________ considered ____________________ on the findings of audit services.

Members of the AICPA shall comply with standards and interpretations designated by the _________________________.

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

Fees based on the number of hours or days worked are considered on the findings of audit services.