Deck 10: Professional Responsibilities

Question 1

The final opportunity to identify and eliminate or at least neutralize adversarial bias of testifying experts falls to opposing counsel.

Answer 1

False

Question 2

Which of the following statements best defines the principle of independence as per AICPA's Code of Professional Conduct,ET Sec.55,Article IV?

A) It requires a member to discharge professional responsibilities with competence and diligence.
B) It imposes the responsibility to render services promptly and carefully, to be thorough, and to observe applicable technical and ethical standards.
C) It precludes relationships that may appear to impair a member's objectivity in rendering various professional services.
D) It induces members to disclose any confidential client information without the specific consent of the client.

Answer 2

C

Question 3

AICPA's Code of Professional Conduct helps members to monitor their own behavior and provides a program for resolving disputes.

Answer 3

True

Question 4

As per AICPA's Guide for Complying with Rules 102-505 (2008),if the threat is evaluated as significant the member should withdraw from the engagement at once.

Question 5

Statement on Standards for Consulting Services (SSCS)No.1 defines consulting services as all professional services rendered by any authoritative external regulatory force to their associate organizations.

Question 6

Which of the following statements best differentiates a profession and a professional?

A) A profession is an occupation that requires advanced education and training and a professional is a person who oversees the behavioral actions of those who practice a profession.
B) A profession is a value-based internal force for behavioral action and a professional is a person who oversees the behavioral actions of those who practice a profession.
C) A profession is an occupation that requires advanced education and training and a professional is a person who practices a profession.
D) A profession is an occupation that requires advanced education and training and a professional is a value-based internal force for behavioral action.

Question 7

Which of the following statements is true of AICPA's Code of Professional Conduct?

A) Although AICPA membership is voluntary, membership mandates compliance with the Code of Professional Conduct.
B) The purpose of the Code is to induce the accountants through guidance, rules, interpretations, and rulings to join the AICPA.
C) The code helps members monitor their own behavior but it does not provide a framework for resolving disputes.
D) The Code has two sections: principles and rationales.

Question 8

As per AICPA's Guide for Complying with Rules 102-505 (2008),acceptable level is a level at which a reasonable and informed third party would be likely to conclude,weighing all the specific facts and circumstances,that compliance with the rules is not compromised.

Question 9

Which of the following is the AICPA's Code of Professional Conduct principle that requires a member to observe the principles of objectivity,independence,and due care?

A) general standards
B) integrity
C) accounting principles
D) due professional care

Question 10

Paul Lewis,forensic accountant,has been engaged by a claimant,Ovizone Company to access the financial loss suffered due to acquisition of Skinet Corp and testify it in the form of a report.Ovizone claims that the acquisition occurred only because of the negligent business valuation made by Trufinance Company.Halfway through the engagement,Lewis realized that Ovizone suffered loss due to Trufinance's negligence in valuation.But,Lewis had very limited technical knowledge in business valuation.Which of the following AICPA Rules of Professional Conduct should Lewis focus on while rendering his testifying report?

A) Integrity and objectivity - Rule 102
B) Independence - Rule 101
C) General Standards - Rule 201
D) The public trust - Rule 203

Question 11

Which of the following is a principle of AICPA's Code of Professional Conduct?

A) be in compliance with professional standards of all professional bodies
B) adequately plan and supervise all professional services
C) cooperate with other professional members to improve the art of accounting and to maintain the public's confidence
D) obtain sufficient and relevant data to afford a reasonable basis for conclusions or recommendations in relation to any professional services performed

Question 12

The first opportunity to identify and eliminate or at least neutralize adversarial bias of testifying experts falls to expert witness himself.

Question 13

Which of the following is an obligation that relates to professional responsibility?

A) to ensure all financial processes of the organization are insulated from fraudulent activities
B) to always do exactly what a client wants no matter what the circumstances
C) cooperate with other professional members to improve the art of accounting, maintain the public's confidence
D) to employ the degree of knowledge, skill, and judgment ordinarily possessed by members of the profession

Question 14

ACFE,the world's largest antifraud organization,requires its members to comply with six fundamental rules as per ACFE's Code of Professional Standards.

Question 15

Which of the following statements is true of characteristics of a profession?

A) It enjoys a high level of public trust and confidence even though it is never legalized by a regulatory body.
B) It is organized into associations and there are specific requirements for admission into such associations and maintenance of membership.
C) There are published authoritative performance and ethical standards for a profession even though it is never legalized by a regulatory body.
D) Violations of a profession's performance and ethical standards would always result in expulsion from membership.

Question 16

Advocacy is the threat that a member will promote a client or employer's position to the point that his or her objectivity is compromised.

Question 17

Which of the following statements best differentiates a principle and a rule as per AICPA's Code of Professional Conduct?

A) A principle is an external person who oversees the behavioral actions of those who practice a profession, while a rule is a value-based internal force for behavioral action.
B) A principle is an external person who oversees the behavioral actions of those who practice a profession, while a rule is an authoritative regulatory force for behavioral action.
C) A principle is a value-based internal force for behavioral action and a rule is an authoritative regulatory force for behavioral action.
D) A principle is regulatory force with advanced education and training and a rule is a value-based internal force for behavioral action.

Question 18

The purpose of the AICPA's Code of Professional Conduct is to

A) induce the accountants through guidance, rules, interpretations, and rulings to join the AICPA.
B) help AICPA members monitor their own behavior.
C) employ the degree of knowledge, skill, and judgment possessed by a rational individual.
D) fulfil all the client requirements included in the engagement agreement.

Question 19

As professional standards serve to improve the consistency and quality of practice,various organizational standards would always be consistent with each other.

Question 20

A professional association enjoys a high level of public trust and confidence even though it can never be legalized.

Question 21

Which of the following statements best defines the standard of client interest as per the consulting service standards contained in SSCS No.1?

A) It requires a member to inform the client of conflicts of interest, significant reservations regarding the scope and benefits of the engagement, and significant findings.
B) It induces members to disclose any confidential client information without the specific consent of the client.
C) It urges the members to adhere the standards promulgated by various professional bodies designated by Council.
D) It requires a member to serve the client while maintaining integrity and objectivity.

Question 22

________ occurs when a testifying expert is specifically hired to represent the engaging attorney's theory.

A) Conscious bias
B) Unconscious bias
C) Witting bias
D) Selection bias

Question 23

Which of the following statements is true of unconscious adversarial bias for testifying expert witnesses?

A) It occurs when an expert is specifically hired to represent the engaging attorney's theory.
B) Identifying and eliminating, or at least neutralizing, unconscious bias is no big task.
C) It is extremely prevalent among law enforcement and government witnesses.
D) The first opportunity to identify and eliminate unconscious bias falls to opposing counsel.

Question 24

As per ACFE Standards of Professional Conduct,the principle of ________ require a member not to commit discreditable acts and to always conduct themselves in the best interests of the profession.

A) understanding with client
B) integrity and objectivity
C) communication with the client
D) professional competence and confidentiality

Question 25

Which of the following statements is true of the rule of accounting principles in the AICPA's Code of Professional Conduct,ET Sec.200,Rule 203?

A) A member shall express an opinion or state affirmatively that the financial statements of an entity are presented in conformity with GAAP.
B) A member shall state that he or she is not aware of any material modifications that should be made to financial statements if they contain any departure from accounting principles that has a material effect.
C) A member shall not state that he or she is aware of any material modifications that should be made to financial statements if they contain any departure from accounting principles that has a material effect.
D) A member shall not express an opinion or state affirmatively that the financial statements of an entity are presented in conformity with GAAP.

Question 26

Which of the following are the four general standards a member has to comply as per AICPA Rules of Professional Conduct,Rule 201?

A) professional competence, due professional care, planning and supervision, and integrity and objectivity
B) professional competence, due professional care, public trust, and sufficient relevant data
C) professional competence, due professional care, planning and supervision, and sufficient relevant data
D) independence, sufficient relevant data, due professional care, and integrity and objectivity

Question 27

As per AICPA's Code of Professional Conduct,the rules of ________ urge members to not knowingly misrepresent facts or subordinate their judgment to others.

A) general standards
B) integrity and objectivity
C) accounting principles
D) independence and compliance

Question 28

As per ACFE Standards of Professional Conduct,which of the following requires a member not to disclose privileged information obtained during the course of an engagement without the express consent of the client or order of a court?

A) confidentiality and integrity
B) client interest and equal treatment
C) professionalism and fair dealing
D) due professional care and objectivity

Question 29

Which of the following statements is true of the principle of due professional care in the ACFE Standards of Professional Conduct?

A) It requires a member to commit discreditable acts and to always conduct themselves in the best interests of the profession.
B) It urges members to qualify the understanding with the client for any significant changes.
C) It requires members to adequately plan and supervise professional services.
D) It urges a member to express an opinion or state affirmatively that the financial statements of an entity are presented in conformity with GAAP.

Question 30

Which of the following statements best defines the principle of integrity as per AICPA's Code of Professional Conduct ET Sec.54,Article III?

A) It requires a member to be honest and candid within the constraints of client confidentiality.
B) It urges the members to adequately plan and supervise the performance of professional services.
C) It precludes relationships that may appear to impair a member's objectivity in rendering various professional services.
D) It induces members to disclose any confidential client information without the specific consent of the client.

Question 31

Which of the following is a rule of AICPA's Code of Professional Conduct?

A) discharging responsibilities with integrity, objectivity, due professional care, and a genuine interest in serving the public
B) be independent in the performance of professional services
C) cooperating with other professional members to improve the art of accounting, maintaining the public's confidence
D) carrying out the profession's special responsibilities for self-governance

Question 32

Which of the following statements is true of AICPA's Code of Professional Conduct?

A) The principles of AICPA's Code of Professional Conduct are specific and enforceable.
B) The rules of the AICPA's Code of Professional Conduct call for a commitment to moral behavior and an emphasis on maintaining the public's trust.
C) A principle is an authoritative regulatory force for behavioral action and a rule is a value-based internal force for behavioral action.
D) Principles provide a framework for rules by defining the spirit, reasoning, and meaning of the rules.

Question 33

Which of the following statements best defines the rule of compliance as per AICPA's Code of Professional Conduct,ET Sec.200,Rule 202?

A) It requires a member to be honest and candid within the constraints of client confidentiality.
B) It urges the members to adhere the standards promulgated by various professional bodies designated by Council.
C) It precludes relationships that may appear to impair a member's objectivity in rendering various professional services.
D) It induces members to disclose any confidential client information without the specific consent of the client.

Question 34

Which of the following is a fundamental principle of NACVA's Professional Standards?

A) Accept all assignments that can reasonably be completed within the time provided by clients.
B) Always do exactly what a client wants no matter what the circumstances.
C) Express an opinion with qualification that the member or a firm has financial interest or contemplated interest in the subject business.
D) Serve the client's interest by seeking to accomplish the objectives established with the client, while maintaining integrity and objectivity.

Question 35

As per Statement on Standards for Consulting Services (SSCS)No.1,the standard of ________ requires a written or oral agreement with the client about each party's respective responsibilities and the nature,scope,and limitations of the engagement.

A) client interest
B) understanding with the client
C) communication with the client
D) professional competence

Question 36

As per AICPA's Code of Professional Conduct,________ imposes the responsibility to render services promptly and carefully,to be thorough,and to observe applicable technical and ethical standards.

A) integrity
B) independence
C) diligence
D) objectivity

Question 37

Which of the following statements is true of the standards of professional organizations?

A) NACVA's Professional Standards, which are applicable to its members when providing any taxation services, require compliance with the ten fundamental rules.
B) AICPA, the world's largest valuation services organization, requires its members to comply with six fundamental principles as per AICPA's Code of Professional Standards.
C) Seven consulting service standards are contained in Statement on Standards for Consulting Services No. 1, including the four general standards provided by Rule 203 of the ACFE Rules of Professional Conduct.
D) Six principles are identified in the AICPA Code of Professional Conduct and they call for a commitment to moral behavior and an emphasis on maintaining the public's trust.

Question 38

As per Statement on Standards for Consulting Services (SSCS)No.1,the standard of ________ requires a member to inform the client of conflicts of interest,significant reservations regarding the scope and benefits of the engagement,and significant findings.

A) client interest
B) understanding with the client
C) communication with the client
D) professional competence

Question 39

As per AICPA's Code of Professional Conduct,ET Sec.56,Article V,which of the following statements is true of the principle of due care?

A) It requires a member to be honest and candid within the constraints of client confidentiality.
B) It imposes the obligation to be impartial, intellectually honest, and free of conflicts of interest.
C) It requires a member to discharge professional responsibilities with competence and diligence.
D) It precludes relationships that may appear to impair a member's objectivity in rendering various professional services.

Question 40

As per AICPA's Code of Professional Conduct,the principle of ________ imposes the obligation to be impartial,intellectually honest,and free of conflicts of interest.

A) public trust
B) independence
C) diligence
D) objectivity

Question 41

What's the difference between a principle and a rule? Do principles provide a framework for rules and,if yes,how?

Question 42

"Forensic accountants must display the attribute of trustworthiness." Explain why trust is important in any forensic accountants' professional relationships.

Question 43

John Miller is employed at an auditing firm which offers forensic accounting and income tax services.His next engagement is with a tax client,a partnership firm,to assist in the determination of a withdrawing partner's entitlement.The withdrawing partner owns another firm also and John's elder brother is an employee in that firm.Which of the following is the threat faced by John Miller as per AICPA's Guide for Complying with Rules 102-505 (2008)?

A) self-interest threat
B) advocacy threat
C) familiarity threat
D) self-review threat

Question 44

Briefly explain the term professional responsibility.Identify three obligations that relate to professional responsibility.

Question 45

"Identifying and eliminating,or at least neutralizing,adversarial bias is no small task." Explain the parties capable of identifying and eliminating,or at least neutralizing,adversarial bias.

Question 46

Seven consulting service standards are contained in Statement on Standards for Consulting Services No.1,including the four general standards provided by Rule 201 of the AICPA's Rules of Professional Conduct.Briefly explain the other three standards.

Question 47

Steven Smith has been engaged by a counsel to assist a fellow CPA in an accounting malpractice action against Krynton Company.Five years back,Steven's wife used to work as finance manager for Krynton.During the engagement,Krynton warned Steven that his wife will be sued for financial treachery if the prevailing accounting malpractice action is ruled against the company.Which of the following is the threat faced by Steven Smith as per AICPA's Guide for Complying with Rules 102-505 (2008)?

A) familiarity threat
B) advocacy threat
C) undue influence threat
D) self-review threat

Question 48

Which of the following is a primary driver of professional responsibility failure?

A) practitioners overestimating their respective skill sets
B) practitioners relying on fellow members' work
C) practitioners specifically representing the engaging attorney's theory
D) practitioners subordinating individual judgement to professional rules

Question 49

How is "A Guide for Complying with Rules 102-505 (2008)" useful in making and acting on informed ethical decisions? Briefly explain the threats and safeguard approach described in "A Guide for Complying with Rules 102-505 (2008)."

Question 50

Which of the following statements best defines the adverse interest threat as per AICPA's Guide for Complying with Rules 102-505 (2008)?

A) the threat that a member will not appropriately evaluate the results of a service performed by the member or by an individual in the member's firm as part of providing another service
B) the threat that a member will promote a client or employer's position to the point that his or her objectivity is compromised
C) the threat that a member will not be objective because his or her interests are in opposition to those of a client or employer
D) the threat that, because of a long or close relationship with a client or employer, a member will become too sympathetic to that entity's interests or too accepting of its work

Question 51

Explain the sequence of actions to be followed to reconcile inconsistencies in various organizational standards.

Question 52

Explain the term adversarial bias of expert witnesses.What are the main sources of adversarial bias?

Question 53

As per AICPA's Guide for Complying with Rules 102-505 (2008),________ implies that a member will subordinate his or her judgment to that of an individual associated with a client,employer,or other relevant third party because of the individual's reputation or expertise.

A) self-interest threat
B) reputation threat
C) undue influence threat
D) self-review threat