Chapter 4 - Chapter 4 Multiple-Choice Questions 1. easy b...

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Chapter 4 Multiple-Choice Questions 1. Society has attached a special meaning to the term “professional.” A professional is: easy a. someone who has passed a qualifying exam to enter the job market. b 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. The underlying reason for a code of professional conduct for any profession is: easy a. the need for public confidence in the quality of service of the profession. a b. that it provides a safeguard to keep unscrupulous people out. c. that it is required by federal legislation. d. that it allows licensing agencies to have a yardstick to measure deficient behavior. 3. A challenge associated with the Ethical Principles stated in the Code of Professional Conduct is: easy a. the emphasis on positive activities. c b. that they identify ideal conduct. c. the difficulty of enforcing principles, or general ideals. d. that there are too many to remember. 4. For which of the following professional services must CPAs be independent? easy a. Management advisory services. b b. Audits of financial statements. c. Preparation of tax returns. d. All three of the above. 5. “Independence” in auditing means: easy a. maintaining an indirect financial interest. c b. not being financially dependent on a client. c. taking an unbiased and objective viewpoint. d. being an advocate for a client. 6. When CPAs are able to maintain their actual independence, it is referred to as independence in: easy a. conduct. c b. appearance. c. fact. d. total. 7. Which of the following statements is true? The CPA firm will lose its independence if: medium a. a staff auditor providing audit services to the client acquires stock in that client. a b. a staff tax preparer who provides 15 hours of non-audit services to the client acquires stock in that client. c. an audit manager in an office different than the office providing audit services has a direct, immaterial financial interest in the audit client. d. a covered member has an indirect, immaterial financial interest in an audit client. 8. easy Interpretations of Rule 101 prohibit covered members from owning any stock or other direct investment in audit clients. Covered members include all but which of the following? a a. All partners in an office that has no responsibility for the engagement. Arens/Elder/Beasley
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b. The firm and its employee benefit plans. c. Individuals on the attest engagement. d. All of the above describe covered members. 9.
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Chapter 4 - Chapter 4 Multiple-Choice Questions 1. easy b...

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