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AUD NINJA > Ethics & Professional Responsibilities > Flashcards

Ethics & Professional Responsibilities Flashcards

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1
Q

Audit of Non-Issuers - Standard

A

Generally Accepted Auditing Standards (GAAS) issued by AIPCA

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2
Q

Audit of Non-Issuers - Code of Conduct

A

AICPA Code of Professional Conduct

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3
Q

Audit of Issuers - Standard

A

PCAOB Auditing Standards and GAAS

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4
Q

Audit of Issuers - Code of Conduct

A

AICPA Code of Professional Conduct
Securities Exchange Commission (SEC)
Sarbanes-Oxley Act (SOX)

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5
Q

International Audits - Standard

A

International Standards on Auditing (ISA)

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6
Q

International Audits - Code of Conduct

A

IESBA Code of Conduct

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7
Q

Governmental Audits - Standard

A

Generally Accepted Government Auditing Standards (GAGAS)

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8
Q

Governmental Audits - Code of Conduct

A

AICPA Code of Professional Conduct

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9
Q

Attestation Engagements - Standard

A

Statements on Standards for Attestation Engagements (SSAEs)

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10
Q

Attestation Engagements - Code of Conduct

A

AICPA Code of Professional Conduct

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11
Q

Accounting & Review Services - Standard

A

Statements on Standards for Accounting and Review Services (SSARs)

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12
Q

Accounting & Review Services - Code of Conduct

A

AICPA Code of Professional Conduct

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13
Q

Sets ethical standards for CPAs and provides a framework for resolving ethical dilemmas

A

AICPA Code of Professional Conduct

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14
Q

Designed to ensure that CPAs carry out their duties with professionalism, integrity, objectivity, and in the best interests of the public

A

AICPA Code of Professional Conduct

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15
Q

AICPA Code of Professional Conduct applies to which members?

A

Members in Public Practice
Members in Business
All Other Members

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16
Q

Integrity & Objectivity applies to which type of AICPA member?

A

Members in Public Practice
Members in Business
All Other Members

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17
Q

Independence applies to which type of AICPA member?

A

Members in Public Practice

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18
Q

General Standards applies to which type of AICPA member?

A

Members in Public Practice
Members in Business

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19
Q

Compliance with Standards Rule applies to which type of AICPA member?

A

Members in Public Practice
Members in Business

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20
Q

Accounting Principles Rule applies to which type of AICPA member?

A

Members in Public Practice
Members in Business

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21
Q

Confidentiality applies to which type of AICPA member?

A

Members in Public Practice

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22
Q

Contingent Fees applies to which type of AICPA member?

A

Members in Public Practice

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23
Q

Commission & Referral Fees applies to which type of AICPA member?

A

Members in Public Practic

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24
Q

Advertising & Other Solicitation applies to which type of AICPA member?

A

Members in Public Practice

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25
Forms of Practices and Names applies to which type of AICPA member?
Members in Public Practice
26
Discreditable Acts applies to which type of AICPA member?
Members in Public Practice Members in Business All Other Members
27
Integrity & Objectivity implies...
Honesty No conflict of interest Free from bias Impartiality No misrepresentation of facts Auditor's judgment
28
Do Audits of Financial Statements of Issuers (PCAOB AS) require independence?
Yes
29
Do Audits of Financial Statements on Non-Issuers (GAAS) require independence?
Yes
30
Do Audits of Interim Financial Statements (PCAOB AS / GAAS) require independence?
Yes
31
Do Governmental Audits require independence?
Yes
32
Do Examination (SSAE) engagements require independence?
Yes
33
Do Review (SSAE) engagements require independence?
Yes
34
Do Agreed-Upon Procedures (SSAE) engagements require independence?
Yes
35
Do Review Services (SSARs) engagements require independence?
Yes
36
Do Consulting Services engagements require independence?
No
37
Do Tax Services engagements require independence?
No
38
Do Valuation Services engagements require independence?
No
39
Do Accounting Services engagements require independence?
No
40
Do Bookkeeping Services engagements require independence?
No
41
Do Training Services engagements require independence?
No
42
Do Preparation Engagement (SSARs) require independence?
No
43
Do Compilation Engagement (SSARs) require independence?
No
44
Audit Firm
Covered Member
45
Audit Team
Covered Member
46
All Partners of the Audit Firm Office / Members with an Influencing Position in the Firm
Covered Member
47
Firm Members providing more than 10 hours of Non-Attest Services to a client
Covered Member
48
Employee Benefit Plans of the Audit Firm
Covered Member
49
Immediate family of Covered Members includes...
Spouse Related Dependents Unrelated Dependents
50
Close relatives of Covered Members includes...
Parents Sibling Non-dependent child
51
Duration of independence
Sustained from the date the engagement letter is signed until the professional relationship's termination
52
Threat where a member will not act with objectivity because the member's interest are opposed to the client's interests.
Adverse Independence Threat (Threat to Independence)
53
Threat when a member promotes or supports a client's interests or positions to such an extent that the member's objectivity or independence is compromised.
Advocacy Threat (Threat to Independence)
54
Threat when a member becomes overly sympathetic to the client's interests of excessively accepting of the client's work or products, which may jeopardize their objectivity.
Familiarity Threat (Threat to Independence)
55
Threat when a member takes on the role of client management or assumes management responsibilities.
Management Participation Threat (Threat to Independence)
56
Threat arises when a member (e.g. auditor) could benefit, either financially or in some other manner, from an interest in, or relationship with, a client or persons associated with the client.
Self-Interest Threat (Threat to Independence)
57
Threat arises when a member is required to evaluate the results of a previous judgment made or service performed by them, or supervised by them.
Self-Review Threat (Threat to Independence)
58
Threat arises when a member's judgment is subordinated or compromised due to external pressures, coercion, or influences.
Undue Influence Threat (Threat to Independence)
59
What are profession-based safeguards against threats to independence?
Code of Conduct Continuing Professional Education Legislation
60
What are client-based safeguards against threats to independence?
Corporate governance structures Internal audit function Policies on hiring audit firm personnel
61
What are audit firm based safeguards against threats to independence?
Quality control standards Peer reviews Rotation of audit partners Policies to limit non-audit services to audit clients
62
What is a direct financial relationship?
Owning stocks General partnership in partnership interest
63
What is an indirect financial relationship?
Shares in mutual funds Limited partnership interest
64
Does a material direct financial relationship by a covered member (except close relatives) impair independence?
Yes
65
Does an immaterial direct financial relationship by a covered member (except close relatives) impair independence?
Yes
66
Does a material direct financial relationship by a close relative impair independence?
Yes
67
Does an immaterial direct financial relationship by a close relative impair independence?
No
68
Does a material indirect financial relationship by a covered member (except close relatives) impair independence?
Yes
69
Does an immaterial indirect financial relationship by a covered member (except close relatives) impair independence?
No
70
Does a material indirect financial relationship by a close relative impair independence?
Yes
71
Does an immaterial indirect financial relationship by a close relative impair independence?
No
72
Is independence impaired when a member, their firm, or a close relative, have a loan or guarantee to/from an audit client?
Yes
73
Do loans that are grandfathered impair independence?
No
74
Do loans that are in accordance with market terms and conditions impair independence?
No
75
Do loans that are fully collateralized impair independence?
No
76
Does credit card debt with balances up to $10,000 per month impair independence?
No
77
Do FDIC insured checking accounts impaired independence?
No
78
Is independence impaired by gifts?
Depends on the value of the gift.
79
What are the General Standards of the AICPA Code of Professional Conduct?
Professional competence Due professional care Planning and supervision Sufficient relevant data Third-party provider
80
What are the exceptions to the Confidentiality rules?
Investigations and inquiries Quality reviews Subpoena or Court orders
81
What type of Contingent Fees are allowed?
Fees fixed by courts Representing in tax cases
82
What services are not allowed to have Contingent fees?
Audit or Review Attestation services Review & Compilation Preparing tax returns
83
For what type of client are commission & referral fees allowed and not allowed?
Allowed - non-attest client Not allowed - attest client
84
What type of advertising is not allowed?
False Misleading Deceptive Cannot claim a guaranteed refund
85
What types of acts are considered discreditable to the profession?
Discrimination Negligence in work Withholding client records Violation of confidentiality Fraudulent marketing Solicitation and disclosure of CPA exam questions
86
What established the PCAOB?
Sarbanes-Oxley Act 2002
87
Who must register with the PCAOB?
Auditors of issuers
88
Which board is empowered to establish and adopt standards relating to auditing, attestation, quality control, ethics, and independence of auditors of public companies?
PCAOB
89
According to the PCAOB, how long must audit working papers and related documentation be retained?
Seven years
90
How often must firms auditing more than 100 issuers be inspected by the PCAOB?
Annually
91
How often must firms auditing less than 100 issuers be inspected by the PCAOB?
Once every three years
92
Are foreign accounting firms that audit U.S. public companies subject to the rules and regulations established by the PCAOB?
Yes
93
According to the PCAOB, how often must the key audit personnel rotate on an audit?
Lead (primary) audit partner and the concurring (review) partner must rotate off the audit engagement every 5 years.
94
Who oversees the PCAOB?
The SEC has oversight and enforcement authority over the PCAOB.
95
Who has authority to issue sanctions?
SEC
96
Who establishes specific requirements to ensure CPAs who audit Employee Benefit Plans are independent and free from any conflicts of interest?
Department of Labor (DOL)
97
What agency is an independent, non-partisan agency that works for the U.S. congress?
Governmental accountability office (GAO)
98
What is the primary function of the governmental accountability office (GAO)?
To audit federal agencies to ensure effective, efficient, and transparent use of public funds.
99
Who investigates how the federal government spends taxpayer dollars?
Governmental accountability office (GAO)

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