Ethics Final Exam

Ethics Final Exam - 1. Which of the following statements...

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1. Which of the following statements best describes the ethical standard of the profession pertaining to advertising and solicitation? a. All forms of advertising and solicitation are prohibited. b. There are no prohibitions regarding the manner in which CPAs may solicit new business. c. A CPA may advertise in any manner that is not false, misleading, or deceptive. d. A CPA may only solicit new clients through mass mailings. 2. Under the ethical standards of the profession, which of the following situations involving nondependent members of an auditor's family is most likely to impair the auditor's independence? a. A parent's immaterial investment in a client. b. A first cousin's loan from a client. c. A spouse's employment with a client. d. A sibling's loan to a director of a client. 3. Under the ethical standards of the profession, which of the following investments in a client is not considered to be a direct financial interest? a. An investment held through a non-client regulated mutual fund. b. An investment held through a non-client investment club. c. An investment held in a blind trust. d. An investment held by the trustee of a trust. 4. Burrow & Co., CPAs, have provided annual audit and tax compliance services to Mare Corp. for several years. Mare has been unable to pay Burrow in full for services Burrow rendered 19 months ago. Burrow is ready to begin fieldwork for the current year's audit. Under the ethical standards of the profession, which of the following arrangements will permit Burrow to begin the fieldwork on Mare's audit? a. Mare sets up a two-year payment plan with Burrow to settle the unpaid fee balance. b. Mare commits to pay the past due fee in full before the audit report is issued. c. Mare gives Burrow an 18-month note payable for the full amount of the past due fees before Burrow begins the audit. d. Mare engages another firm to perform the fieldwork, and Burrow is limited to reviewing the work papers and issuing the audit report. 5. Kar, CPA, is a staff auditor participating in the audit engagement of Fort, Inc. Which of the following circumstances impairs Kar's independence? a. During the period of the professional engagement, Fort gives Kar tickets to a football game worth $75. b. Kar owns stock in a corporation that Fort's 401(k) plan also invests in. c.
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This note was uploaded on 03/09/2010 for the course ACCT 423 taught by Professor Ryan during the Winter '10 term at UCLA.

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Ethics Final Exam - 1. Which of the following statements...

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