Test%20Questions%20Chapter%2030

Test%20Questions%20Chapter%2030 - Chapter 3 Professional...

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Unformatted text preview: Chapter 3 Professional Ethics True/False Questions 1. The Rules portion of the AICPA Code of Professional Conduct must be followed by only those members in private practice. Answer: False Difficulty: Medium 2. The AICPA Code of Professional Conduct derives its authority from the Bylaws of the AICPA. Answer: True Difficulty: Medium 3. An immaterial loan from the CPA to an officer of a client impairs the independence of the CPA. Answer: True Difficulty: Medium 4. Financial interests of a CPA's nondependent children are attributed directly to the CPA. Answer: False Difficulty: Medium 5. Statements on Accounting and Review Services are enforceable under the AICPA Code of Professional Conduct. Answer: True Difficulty: Easy 6. CPAs may not advertise as to any special expertise other than in accounting, auditing, and tax. Answer: False Difficulty: Medium 7. A CPA may receive a commission for recommending a particular computer system to an audit client. Answer: False Difficulty: Easy 8. The communications between CPAs and their clients are privileged under federal law. Answer: False Difficulty: Easy Whittington, Principles of Auditing, Fifteenth Edition 27 Chapter 3 Professional Ethics 9. CPAs can advertise the fees only for their nonattest services. Answer: False Difficulty: Easy 10. The American Institute of Certified Public Accountants has been the primary source for ethical rules for internal auditors. Answer: False Difficulty: Easy Multiple Choice Questions 11. ABC Company is audited by the Phoenix office of Willingham CPAs. Which of the following individuals would be least likely to be considered a “covered member” by the independence standard? A) Staff assistant on the audit. B) An audit partner in the Eloi office. C) A tax partner in Phoenix who performs no attest services for ABC Company or for any other clients. D) The partner in charge of Willingham CPAs (she does no work on the ABC Company Audit). Answer: B Difficulty: Hard 12. Which of the following statements is true with respect to the SEC's concept of independence when an auditor both prepares financial statements and audits those financial statements for a client? A) The auditor is not independent. B) The auditor is independent if he or she is able to maintain a level of professional detachment. C) The auditor can audit the financial statements only if the audit process does not culminate in the expression of an opinion on the financial statements. D) The auditor cannot audit the financial statements since a lack of integrity exists. Answer: A Difficulty: Medium 28 Whittington, Principles of Auditing, Fifteenth Edition Chapter 3 Professional Ethics 13. Auditors are periodically punished for holding an investment in a client. This violates which ethical rule?...
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This note was uploaded on 04/09/2011 for the course ACCT 4773 taught by Professor Pro during the Spring '11 term at Dallas.

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Test%20Questions%20Chapter%2030 - Chapter 3 Professional...

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