AUDITING - CHAPTER 4 - AUDITING - CHAPTER 4 1. Society has...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: AUDITING - CHAPTER 4 1. Society has attached a special meaning to the term "professional." A professional is a.someone who has passed a qualifying exam to enter the job market. b. a person who is expected to conduct himself or herself at a higher level than the requirements of society's laws or regulations. c.any person who receives pay for the services performed. d. someone who has both an education in the trade and on-the-job experience received under an experienced supervisor. 2. Interpretations of the Rules of Conduct do not prohibit an auditor from serving as a.a director or officer of an audit client company. b. an underwriter for the sale of client's bonds. c.a trustee of a client's pension fund. d. an honorary director for a not-for-profit charitable or religious organization. 3. Which of the following best describes why publicly traded corporations follow the practice of having the outside auditor appointed by the board of directors or elected by the stockholders? a.To comply with the regulations of the Financial Accounting Standards Board. b. To emphasize auditor independence from the management of the corporation. c.To encourage a policy of rotation of the independent auditors. d. To provide the corporate owners with an opportunity to voice their opinion concerning the quality of the auditing firm selected by the directors. 4. Which of the following is not one of the four parts of the AICPA's Code of Professional Conduct ? a.Depositions. b. Rules of Conduct. c.Interpretations. d. Principles. 5 . Although it is possible to take the extreme position that anything affecting either independence in fact or in appearance must be eliminated to ensure a high level of respect in the community, the difficulty with this position is that it is likely to restrict significantly a.the services offered to clients. b. the freedom of CPAs to practice in the traditional manner. c.the ability of CPA firms to hire competent staff. d. all three of the above. 6. Which one of the following statements is not true? a.The auditor's responsibility to act in accordance with professional standards is greater than the responsibility for confidentiality. b. Information obtained by a CPA from a client is not privileged. c.When a CPA firm conducts an AICPA-authorized peer review of the quality controls of another CPA firm, permission of the client is not needed in order to examine the working papers. d. A CPA firm which observes substandard working papers of another firm cannot initiate a complaint of substandard performance with the Ethics Division Trial Board because of the confidentiality of the working papers. 7. The Independence Standards Board was formed to provide a conceptual framework for independence issues related to audits of a.privately held companies....
View Full Document

Page1 / 13

AUDITING - CHAPTER 4 - AUDITING - CHAPTER 4 1. Society has...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online