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50 Cards in this Set
- Front
- Back
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According to the ethical standards of the profession, which of the following acts is generally prohibited? A. Purchasing a product from a third party and reselling it to a client. B. Writing a financial mgmt newsletter promoted and sold by a publishing company C. Accepting a commission for recommending a product to a client. D. Accepting engagements obtained through the efforts of third parties. |
Accepting a commission for recommending a product to an audit client. |
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To exercise due professional care an auditor should |
Critically review the judgement exercised by those assisting in the audit |
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May a CPA hire for the CPA's public accounting firm a non-CPA systems analyst who specializes in developing computer systems? |
Yes, provided the CPA is able to supervise the specialist and evaluate the specialist's end product. |
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Generally accepted auditing standards are |
Pronouncements issued by the Auditing Standards Board |
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Quality control for a CPA firm, as referred to in Statements on Quality Control Standards, applies to |
Auditing and accounting and review services |
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Which of the following is not an element of quality control? |
A. Acceptance and continuance of client relationships and specific engagements B. Human resources C. Internal Control D. Monitoring |
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A CPA firm may communicate it's quality control policies and procedures to its personnel in which manners? |
Orally and written |
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The nature and extent of a CPA firm's quality control policies and procedures depend on |
The CPA firm's size The nature of the CPA firm's practice Cost-benefit consideration |
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Which of the following statements is correct regarding an accountants working papers? |
The accountant owns the working papers but generally may not disclose them without the client's consent or a court order. |
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According to the profession's ethical standards, which of the following events may justify a departure from a Statement of the Governmental Accounting Standards Board? |
Yes -new legislation Yes - evolution of a new form of business transaction |
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According to the ethical standards of the profession, which of the following acts is generally prohibited? |
Retaining client records after an engagement is terminated prior to completion and the client has demanded their return. |
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What is the conceptual difference between the attestation standards and generally accepted auditing standards? |
The attestation standards do not apply to audits of historical financial statements, while the generally accepted auditing standards do.
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Which of the following is not an attestation standard? |
D. A sufficient understanding of internal control shall be obtained to plan the engagement
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Which of the following is most likely to be unique to the audit work of CPAs as compared to work performed by practitioners of other professions?
a. Due professional care b. Competence c. Independence d. Complex body of knowledge |
c. Independence
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The Public Company Accounting Oversee Board's (PCAOB) standards require that due care is to be exercised in the performance of an audit. This standard is ordinarily interpreted to require.... |
Critical review of the judgement exercised at every level of supervision |
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For which of the following can a member of the AICPA receive an automatic expulsion from the AICPA? I. Member is convicted of a crime punishable by imprisonment for more than a year II. Member files his own fraudulent tax return. III. Member files fraudulent tax return for a client knowing that it is fraudulent. |
I, II, and III |
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Which of the following is an example of a safeguard implemented by the client that might mitigate a threat to independence? a. Required continuing education for all attest engagement team members. b. An effective corporate governance structure. c. Required second partner review of an attest engagement. d. Management selection of the CPA firm |
b. an effective corporate governance structure |
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Which of the following is a "self review" threat to member independence? a. An engagement team member has a spouse that serves as CFO of the attest client b. A second partner review is required on all attest engagements c. An engagement team member prepares invoices for the attest client. d. An engagement team member has a direct financial interest in the attest client |
c. An engagement team member prepares invoices for the attest client |
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The profession's ethical standards most likely would be considered to have been violated when a CPA represents that specific consulting services will be performed for a stated fee and it is apparent at the time of the representation that the.... |
Actual fee would be substantially higher |
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During an audit Bill Adams believes that his supervisor's position on an accounting matter, although consistent with the client's desires, materially departs from GAAP-the basis followed for the client's financial statements. Bill discussed his concerns with his supervisor and the matter is still not resolved. Following the AICPA Code of Professional Conduct, which of the following is least likely to be appropriate? |
Bill should use the discreditable acts framework to determine whether his supervisor is involved in an act discreditable to the profession. |
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According to the standards of the profession, which of the following activities would most likely not impair a CPA's independence? |
Providing advisory services for a client |
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Which of the following reports may be issued only by an accountant who is independent of a client? |
Standard report on an examination of a financial forecast. |
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According to the requirements of the public accounting profession, which of the following activities may be required in exercising due care? |
Yes; Consulting with experts No; obtaining specialty accrediation |
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Larry Sampson is a CPA and is serving as an expert witness in trial concerning a corporation's financial statements. Which of the following is(are) true? I. Sampson's status as an expert witness is based upon his specialized knowledge, experience, and training. II. Sampson is required by AICPA ruling to present his position objectively. III. Sampson may regard himself as acting as an advocate. |
I and II
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Kar, CPA, is a staff auditor participating in the audit engagement of Fort, Inc. Which of the following circumstances impairs Kar's independence? |
Kar's sibling is director of internal audit at Fort. |
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Which of the following statements is(are) correct regarding a CPA employee of a CPA firm taking copies of information contained in client files when the CPA leaves the firm? I. A CPA leaving a firm may take copies of information contained in client files to assist another firm in serving that client. II. A CPA leaving a firm may take copies of information contained in client files as a method of gaining technical expertise. |
Neither I and II |
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Which of the following in a authoritative body designated to promulgate attestation standards? |
Auditing Standards Board |
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The auditor with final responsibility for an engagement and one of the assistants have a difference of opinion about the results of an auditing procedure. If the assistant believes it is necessary to disassociated from the matter's resolution, the CPA firm's procedures should enable the assistant to |
Document that member's disagreement with the conclusions reached after appropriate consultation. |
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One of a CPA firm's basic objectives is to provide professional services that conform with professional standards. Reasonable assurance of achieving this basis objective is provided through |
A system of quality control |
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Which of the following is correct concerning PCAOB guidance that uses the term "should"? |
The auditor must comply with requirements unless s/he demonstrates that alternative actions were sufficient to achieve the objectives of the standard. |
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Under the Sarbanes-Oxley Act, most audit working papers must be saved for how many years? |
7 years
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Passage of the Sarbanes-Oxley Act led to the establishment of the which board? |
Public Company Accounting Oversight Board (PCAOB) |
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Under Title II of the Sarbanes-Oxley Act, the auditor of an issuer cannot legally perform which type of service for that issuer? |
Internal audit outsourcing services |
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The audit partner in charge of an audit of a public company may only |
Perform that role for five consecutive years |
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Which of the following is correct concerning membership on the Public Company Accounting Oversight Board? |
Only two of its members may be CPAs |
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The Public Company Accounting Oversight Board (PCAOB) is not responsible for standards related to: |
Accounting |
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A PCAOB engagement that focuses on the sufficiency of a CPA firm's quality control system is most likely to be referred to as a(n) |
Inspection |
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Which statement below is correct concerning communicating the results of a PCAOB inspection? |
The portion of the report issued on a CPA firm's quality control is not ordinarily publicly available |
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Which set of standards does the Public Company Accounting Oversight Board not have the authority to establish for audits of public companies? |
Accounting standards |
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In relation to the AICPA Code of Professional Conduct, the IFAC Code of Ethics for Professional Accountants |
Has fewer outright prohibitions |
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Based on the IFAC Code of Ethics for Professional Accountants, threats to independence arise from all of the following except: |
The audit relationship |
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If an audit firm discovers threats to independence arise from all of the following except: a. Self-interest b. Advocacy c. The audit relationship d. Intimidation |
The audit relationship |
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If an audit firm discovers threats to independence with respect to an audit engagement, the IFAC Code of Ethics for Professional Accountants indicates that the firm should |
Evaluate the significance of the threats and apply appropriate safeguards to reduce them to an acceptable level |
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With respect to the acceptance of contingent fees for professional services, the IFAC Code of Ethics for Professional Accountants indicates that the accounting firm |
Should establish appropriate safeguards around acceptance of a contingent fees |
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With regard to marketing professional services, the IFAC Code of Ethics for Professional Accountants indicates that |
Marketing should be honest and truthful
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What body establishes international auditing standards? |
The International Federation of Accountants |
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Which of the following is not true about international auditing standards? |
International auditing standards require obtaining an attorney's letter |
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Which of the following is most likely to be required in an audit performed in conformity with international auditing standards? |
Audit report inclusion of the location in which the auditor practices |
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Independence standards of the GAO for audits in accordance with generally accepted government auditing standards describe three types of impairments of independence. Which of the following is not one of these types of impairments? a. Personal b. Organizational c. External d. Unusual |
Unusual |
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