2.
|
Which of the following statements best explains why the accounting profession has found it essential to promulgate ethical standards and to establish means for ensuring their observance? 5
|
|
Vigorous enforcement of an established code of ethics is the best way to prevent unscrupulous acts.
|
|
Ethical standards that emphasize excellence in performance over material rewards establish a reputation for competence and character.
|
|
A distinguishing mark of a profession is its acceptance of responsibility to the public.
|
|
A requirement for a profession is to establish ethical standards that stress primarily a responsibility to clients and colleagues.
|
|
|
|
3.
|
Which of the following most completely describes how independence has been defined by the accounting profession? 6
|
|
Performing an audit from the viewpoint of the public.
|
|
Avoiding the appearance of significant interests in the affairs of an audit client.
|
|
Possessing the ability to act with integrity and objectivity.
|
|
Accepting responsibility to act professionally and in accordance with a professional code of ethics.
|
|
|
|
4.
|
According to the ethical standards of the profession, which of the following acts is generally prohibited? 10
|
|
Purchasing a product from a third party and reselling it to a client.
|
|
Writing a financial management newsletter promoted and sold by a publishing company.
|
|
Accepting a commission for recommending a product to an audit client.
|
|
Accepting engagements obtained through the efforts of third parties.
|
|
|
|
5.
|
In which of the following circumstances would a CPA who audits XM Corporation lack independence? 11
|
|
The CPA is a director of, but does not control, YN Corporation, which has a loan from XM.
|
|
The CPA and XM's president each owns 25% of FOB Corporation, a closely held company.
|
|
The CPA has an automobile loan from XM, a financial institution. The loan is collateralized by the automobile.
|
|
The CPA reduced XM's usual audit fee by 40% prior to the audit because XM's financial condition was unfavorable.
|
|
|
|
6.
|
According to the ethical standards of the profession, which of the following acts is generally prohibited? 24
|
|
Issuing a modified report explaining a failure to follow a governmental regulatory agency's standards when conducting an attest service for a client.
|
|
Revealing confidential client information during a quality review of a professional practice by a team from the state CPA society.
|
|
Accepting a contingent fee for representing a client in an examination of the client's federal tax return by an IRS agent.
|
|
Retaining client records after an engagement is terminated prior to completion and the client has demanded their return.
|
|
|
|
7.
|
In accordance with the AICPA’s Statements on Standards for Tax Services, when a reasonable basis exists for omission of an answer to an applicable question on a tax return 28
|
|
The preparer need not provide an explanation for the omission on the return.
|
|
A brief explanation of the reason for the omission must be provided on the return.
|
|
The question should be marked as nonapplicable.
|
|
A note on the return should state that the answer will be provided if the information is requested.
|
|
|
|
8.
|
Which of the following bodies ordinarily would have the authority to suspend or revoke a CPA's license to practice public accounting? 33
|
|
The SEC.
|
|
The AICPA.
|
|
A state CPA society.
|
|
A state board of accountancy.
|
|
|
|
9.
|
Inclusion of which of the following statements in a CPA's advertisement is not acceptable pursuant to the AICPA Code of Professional Conduct? 33
|
|
Paul Fall Certified Public Accountant Fluency in Spanish and French
|
|
Paul Fall Certified Public Accountant J.D., Evans Law School 1984
|
|
Paul Fall Certified Public Accountant Free Consultation
|
|
Paul Fall Certified Public Accountant Endorsed by AICPA
|
|
|
|
10.
|
The PCAOB was established by 33
|
|
The Sarbanes-Oxley Act of 2002.
|
|
The SEC.
|
|
The AICPA.
|
|
The IRS.
|
|
|
|