Exam 3: Judgmental and Ethical Decision-Making Frameworks and Associated Professional Standards

A covered member may not have a loan to or from the client,except for permitted and grandfathered loans.When would nonpayment of tax fees due to the auditor by the client be converted to a loan classification?

The Sarbanes Oxley Act requires management to pre-approve any non-audit service by the auditor,including tax services not specifically prohibited.

Professional skepticism is important because without it auditors are susceptible to accepting weak or inaccurate audit evidence.

Under the AICPA Code of Professional Conduct,rules take precedent over principals.The principals need to only be considered when a rule is apparent.

Julie Webb,CPA takes out an automobile loan with First national Bank of Wellville (FNBW)while attending the University of Wellville.Julie graduates one year later and is hired as an auditor by Best and Driftwood,LLP.Her first assigned audit engagement is with First national Bank of Wellville,a client of Best and Driftwood.As a new audit assistant,Julie continues to pay her automobile loan payments each month.According to the AICPA,Julie is considered a covered member for FNBW independence purposes because of which of the following conditions?

There is a hierarchy of rights to consider when applying rights theory.

Public confidence is mostly maintained by the public accounting profession through integrity based on personal moral standards and it is reinforced by codes of conduct.

The Code of Professional Conduct was adopted by the AICPA membership to provide guidance and rules to only its members in public practice.

Mark Pulley is an auditor at Pulley and Hurst,LLC.If Pulley's five-year-old daughter owns shares of stock in McBurgers Corporation,then Pulley is considered to have what type of interest in McBurgers Corporation?

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

Julie Webb,CPA takes out an automobile loan with First National Bank of Wellville (FNBW)while attending the University of Wellville.Julie graduates one year later and is hired as an auditor by Best and Driftwood,LLP.Her first assigned audit engagement is with First National Bank of Wellville,a client of Best and Driftwood.As a new audit assistant,Julie continues to pay her automobile loan payments each month.According to the AICPA,Julie's independence would be considered

An auditor of a public client may assist a client in designing and implementing its enterprise resource planning system in order to ensure that controls over the system exist prior to the audit.

In which of the following situations would a CPA not be considered independent?

One issue that may threaten independence is that of the time pressure placed on the auditor when an audit is under bid.

The AICPA Rules of Conduct govern the performance of CPAs in carrying out their public responsibilities.

The ethical framework derived from utilitarianism and rights theories indicates all of the following steps except

Members of the AICPA are required to act with integrity and objectivity for which of the following engagements?

An ethical dilemma occurs when there are conflicting moral duties or obligations.

A CPA firm is considered independent when it performs which of the following services for a publicly traded audit client?

In which of the following situations would a CPA not be considered independent?