Question 1

CPAs are no longer able to practice as a sole proprietorship.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is not an aspect of Rule 201 of the General Standards of the Code of Professional Conduct?

Accepted Answer

A) a member must not take on an engagement that is beyond the member's professional competence 
B) a member must exercise duties prudently and professionally 
C) a member must adequately plan and supervise the performance of professional services 
D) a member firm must not advertise services to competing clients

Question 3

Non-audit services prohibited or permitted under Sarbanes-Oxley
Harry Rawlins CPAs,are engaged by DK,Inc. ,a public company to perform the year-end audit.
 A.Discuss the types of service s that Hary Rawlins CPAs wW not be able to perform for DK under the Sarbane s-Oxley Act of 2002 .
B.Under what circumstances may Hary Rawlins CPAs perform certain non-audit services for DK, Inc. under Sarbanes-Oxley Act of 700]?

Accepted Answer

The answer of Non-audit services prohibited or permitted under Sarbanes-Oxley
Harry...

Question 4

Utilitarian theory is an approach for addressing ethical problems by identifying a hierarchy of rights that should be considered in solving ethical problems or dilemmas.

Accepted Answer

A) True 
 B)False

Question 5

Among close relative of the covered member,e.g. ,brothers,sisters,mother,father,and cousins,when is ownership of the client's stock by them considered the same as ownership by the covered member?

Accepted Answer

A) Key financial position. 
B) Immaterial financial interest in the client with covered member's knowledge. 
C) Material financial interest in the client without the covered member's knowledge. 
D) All are considered part of the covered member's close relatives and so would affect the covered member's independence.

Question 6

Audit committees should consider all factors that might affect the independence of the external auditor and should not approve nonaudit services that they believe might impair independence.

Accepted Answer

A) True 
 B)False

Question 7

Only covered members as defined by the AICPA are required to comply with its independence rules.

Accepted Answer

A) True 
 B)False

Question 8

The first step in the ethical framework is to identify the ethical issue(s).

Accepted Answer

A) True 
 B)False

Question 9

Rights theory focuses on evaluating actions in terms of the fundamental rights of the parties involved.

Accepted Answer

A) True 
 B)False

Question 10

The AICPA independence rules only apply for attestation clients.

Accepted Answer

A) True 
 B)False

Question 11

As accounting standards become less rules-based and more principles-based,the role of professional judgement in decision-making will become less important.

Accepted Answer

A) True 
 B)False

Question 12

The Sarbanes-Oxley Act of 2002 amends the Securities and Exchange Act of 1934 and places prohibitions on certain consulting services by auditors for their audit clients.

Accepted Answer

A) True 
 B)False

Question 13

Keeping client information confidential
The rule on confidentiality is intended to protect the client's information.The rule,however,does not apply in certain circumstances.
 A. Explain the nule on conficlentiality.
B. Identify the circumstances in which the nule of confidentiality does not anoly

Accepted Answer

The answer of Keeping client information confidential
The rule on confidentiality...

Question 14

The AICPA may revoke a member's CPA license for violations of its Code of Professional Conduct.

Accepted Answer

A) True 
 B)False

Question 15

An ethical problem occurs when an individual is morally or ethically required to do something that conflicts with the immediate security interests of others.

Accepted Answer

A) True 
 B)False

Question 16

Brenda Hursch,an auditor,would be considered independent for purposes of an audit of Microship Company even though her spouse worked for Microship Company in which of the following positions?

Accepted Answer

A) controller. 
B) treasurer. 
C) order entry staff. 
D) none of the above,all roles would impair independence

Question 17

The highest-order rights include rights granted by the government,such as civil rights,legal rights,rights to own property,and license privileges.

Accepted Answer

A) True 
 B)False

Question 18

Major threats to the independence of the auditor includes compensation schemes,familiarity with the client and time pressures.

Accepted Answer

A) True 
 B)False

Question 19

Direct ownership includes ownership by the CPA plus any spouse or dependent member of his or her household or any partnerships to which the CPA belongs.

Accepted Answer

A) True 
 B)False

Question 20

When making complex,difficult,and important decisions audit professionals typically do not benefit from a structured approach to their decision-making because they need to remain open-minded.

Accepted Answer

A) True 
 B)False

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

CPAs are no longer able to practice as a sole proprietorship.

Which of the following is not an aspect of Rule 201 of the General Standards of the Code of Professional Conduct?

Utilitarian theory is an approach for addressing ethical problems by identifying a hierarchy of rights that should be considered in solving ethical problems or dilemmas.

Among close relative of the covered member,e.g. ,brothers,sisters,mother,father,and cousins,when is ownership of the client's stock by them considered the same as ownership by the covered member?

Audit committees should consider all factors that might affect the independence of the external auditor and should not approve nonaudit services that they believe might impair independence.

Only covered members as defined by the AICPA are required to comply with its independence rules.

The first step in the ethical framework is to identify the ethical issue(s).

Rights theory focuses on evaluating actions in terms of the fundamental rights of the parties involved.

The AICPA independence rules only apply for attestation clients.

As accounting standards become less rules-based and more principles-based,the role of professional judgement in decision-making will become less important.

The Sarbanes-Oxley Act of 2002 amends the Securities and Exchange Act of 1934 and places prohibitions on certain consulting services by auditors for their audit clients.

Keeping client information confidential The rule on confidentiality is intended to protect the client's information.The rule,however,does not apply in certain circumstances. A. Explain the nule on conficlentiality. B. Identify the circumstances in which the nule of confidentiality does not anoly

The AICPA may revoke a member's CPA license for violations of its Code of Professional Conduct.

An ethical problem occurs when an individual is morally or ethically required to do something that conflicts with the immediate security interests of others.

Brenda Hursch,an auditor,would be considered independent for purposes of an audit of Microship Company even though her spouse worked for Microship Company in which of the following positions?

The highest-order rights include rights granted by the government,such as civil rights,legal rights,rights to own property,and license privileges.

Major threats to the independence of the auditor includes compensation schemes,familiarity with the client and time pressures.

Direct ownership includes ownership by the CPA plus any spouse or dependent member of his or her household or any partnerships to which the CPA belongs.

When making complex,difficult,and important decisions audit professionals typically do not benefit from a structured approach to their decision-making because they need to remain open-minded.