Question 1

A CPA can accept a contingent fee in providing tax services for an attest client if:

Accepted Answer

A)   The CPA discloses this fact to the tax client
B)   The CPA receives the permission of the client to accept such a form of payment
C)   The CPA's tax services will be reviewed by a taxing authority
D)   All of theseE) A) and C)
F) A) and B)

Question 2

Why don't auditors prepare financial statements, as well as audit them?

Accepted Answer

A)   It would take away a job from the controller of the company.
B)   It would not eliminate errors in the financial statements.
C)   It would be a conflict of interest and violates ethical standards.
D)   It would streamline the process and be effective.E) B) and C)
F) A) and C)

Question 3

Describe the steps to be taken by a staff accountant who has been told by his/her supervisor to accelerate the recording of revenue into a period earlier than which it should be recognized under GAAP.

Accepted Answer

As a staff accountant, it is important t...

Question 4

Each of the following is a safeguard that helps to mitigate threats to independence except for:

Accepted Answer

A)   Safeguards created by the profession, legislation, or regulation
B)   Safeguards implemented by the attest client, such as a tone at the top
C)   Safeguards developed to ensure independence when performing nonattest services
D)   Safeguards implemented by the firm, including policies and procedures to implement regulatory requirementsE) A) and B)
F) A) and C)

Question 5

Each of the following is an outright restriction on providing nonattest services for an attest client except for:

Accepted Answer

A)   Tax services
B)   Financial information systems design and implementation
C)   Appraisal or valuation services
D)   Internal audit outsourcing servicesE) A) and C)
F) B) and C)

Question 6

During the investigations by the House Subcommittee on Oversight and Investigations, a question that was raised was:

Accepted Answer

A)   Why was fraud allowed to occur at some many companies
B)   Where was the board of directors in all these frauds
C)   Where were the auditors
D)   Why did the internal controls fail in some many fraudsE) A) and B)
F) A) and C)

Question 7

Each of the following were themes of the investigations of the accounting profession during the 1970s and 1980s except for:

Accepted Answer

A)   Whether low-balling to obtain audits impairs independence
B)   Whether nonaudit services impair auditor independence
C)   The need for a report on internal controls
D)   The importance of developing techniques to prevent and detect fraudE) C) and D)
F) None of the above

Question 8

Which of the following is not part of standards for the quality of work?

Accepted Answer

A)   Planning and supervision
B)   Professional competence
C)   Professional data
D)   Professional careE) B) and D)
F) All of the above

Question 9

In the Gee Wiz case, the main ethical issue was:

Accepted Answer

A)   Independence of David in providing tax services to an audit client
B)   Confidentiality in disclosing sensitive information about a client of the CPA firm
C)   Integrity in providing tax services to an audit client through her own entity
D)   Whistleblowing on a clientE) B) and C)
F) All of the above

Question 10

The committee that first recommended that the profession institute a voluntary program for peer review was:

Accepted Answer

A)   Metcalf committee
B)   Cohen committee
C)   The House Subcommittee on Oversight and Investigations
D)   Mintz and Morris committeeE) B) and D)
F) B) and C)

Question 11

Under what circumstances do you think it would be acceptable for a CPA to blow the whistle on financial wrongdoing by a client? What steps should the CPA take before carrying through with the whistle-blowing action?

Accepted Answer

As a CPA, it would be acceptable to blow...

Question 12

What is the maximum amount of time an audit manager or partner may spend on nonattest services for an attest client?

Accepted Answer

A)   20 hours
B)   15 hours
C)   10 hours
D)   8 hoursE) A) and C)
F) C) and D)

Question 13

What are the similarities and differences in the application of the rules of professional conduct in the AICPA with respect to internal accountants who are CPAs and CPA-external auditors?

Accepted Answer

The American Institute of Certified Publ...

Question 14

The ethics rules that applies solely to those who conduct an audit of a client entity is:

Accepted Answer

A)   Independence
B)   Objectivity
C)   Integrity
D)   All of theseE) None of the above
F) B) and C)

Question 15

The accounting issues at failed savings and loan institutions included:

Accepted Answer

A)   The failure to provide adequate allowances for loan losses
B)   The failure to disclose dubious deals between the S&Ls and some of its major customers
C)   The existence of inadequate controls to prevent inadequate allowances and control for dubious deals
D)   All of theseE) C) and D)
F) A) and B)

Question 16

The conceptual framework for the AICPA Independence standards can best be characterized as:

Accepted Answer

A)   A model to prevent fraud from occurring
B)   An approach to identify threats to independence
C)   An approach to identify fraud risks
D)   A model to assist controllers in dealing with differences of opinion with top management on accounting issuesE) A) and B)
F) B) and C)

Question 17

The question that arises in the First Community Church case is whether:

Accepted Answer

A)   The financial statements have been materially misstated
B)   There has been a misappropriation of assets
C)   The auditors lacked independence
D)   All of theseE) None of the above
F) B) and D)

Question 18

One concern in the Armadillo Foods case in the text of the chapter is:

Accepted Answer

A)   The failure of internal controls
B)   Pressure to go along with the misappropriation of assets
C)   The failure of the external auditors to catch fraud
D)   Pressure to meet financial analysts' earnings estimatesE) None of the above
F) C) and D)

Question 19

Sarbanes-Oxley Act (SOX)  sets new standards for governance that will ultimately impact on which of the following?

Accepted Answer

A)   Foreign companies listed on US exchanges only
B)   SEC registrant companies, including foreign companies listed on US
C)   NYSE listing companies
D)   NASDAQ listing companiesE) C) and D)
F) B) and C)

Question 20

The confidentiality standard in the AICPA code provides for exceptions to the rule in:

Accepted Answer

A)   In response to a validly issued court summons
B)   To provide information to the CPA's peer reviewers
C)   To defend oneself in an ethics investigation
D)   All of theseE) A) and C)
F) B) and D)

Exam 4: Aicpa Code of Professional Conduct

Each of the following is a safeguard that helps to mitigate threats to independence except for:

Correct AnswerverifiedShow Answer

Each of the following is an outright restriction on providing nonattest services for an attest client except for:

Correct AnswerverifiedShow Answer

The accounting issues at failed savings and loan institutions included:

Correct AnswerverifiedShow Answer

The conceptual framework for the AICPA Independence standards can best be characterized as:

Correct AnswerverifiedShow Answer

Sarbanes-Oxley Act (SOX) sets new standards for governance that will ultimately impact on which of the following?

Correct AnswerverifiedShow Answer

The question that arises in the First Community Church case is whether:

Correct AnswerverifiedShow Answer

The committee that first recommended that the profession institute a voluntary program for peer review was:

Correct AnswerverifiedShow Answer

A CPA can accept a contingent fee in providing tax services for an attest client if:

Correct AnswerverifiedShow Answer

Why don't auditors prepare financial statements, as well as audit them?

Correct AnswerverifiedShow Answer

Under what circumstances do you think it would be acceptable for a CPA to blow the whistle on financial wrongdoing by a client? What steps should the CPA take before carrying through with the whistle-blowing action?

Correct AnswerAnswered by ExamLex AIAs a CPA, it would be acceptable to blow...View AnswerShow Answer

During the investigations by the House Subcommittee on Oversight and Investigations, a question that was raised was:

Correct AnswerverifiedShow Answer

Describe the steps to be taken by a staff accountant who has been told by his/her supervisor to accelerate the recording of revenue into a period earlier than which it should be recognized under GAAP.

Correct AnswerAnswered by ExamLex AIAs a staff accountant, it is important t...View AnswerShow Answer

The ethics rules that applies solely to those who conduct an audit of a client entity is:

Correct AnswerverifiedShow Answer

Which of the following is not part of standards for the quality of work?

Correct AnswerverifiedShow Answer

What are the similarities and differences in the application of the rules of professional conduct in the AICPA with respect to internal accountants who are CPAs and CPA-external auditors?

Correct AnswerAnswered by ExamLex AIThe American Institute of Certified Publ...View AnswerShow Answer

What is the maximum amount of time an audit manager or partner may spend on nonattest services for an attest client?

Correct AnswerverifiedShow Answer

In the Gee Wiz case, the main ethical issue was:

Correct AnswerverifiedShow Answer

Each of the following were themes of the investigations of the accounting profession during the 1970s and 1980s except for:

Correct AnswerverifiedShow Answer

One concern in the Armadillo Foods case in the text of the chapter is:

Correct AnswerverifiedShow Answer

The confidentiality standard in the AICPA code provides for exceptions to the rule in:

Correct AnswerverifiedShow Answer

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Answered by ExamLex AI
As a CPA, it would be acceptable to blow...
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Answered by ExamLex AI
As a staff accountant, it is important t...
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Correct Answer
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Answered by ExamLex AI
The American Institute of Certified Publ...
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