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Flashcards in Mod 1 Wrong Answers Deck (25):

CPAs are only allowed to depart from a GASB statement only when results of the standard would be...



2 possible circumstances justifying departure from GASB statement standards are...

1 new legislation

2 new form of business transaction


When a supervisor departs from GAAP, the CPA under there supervision can...

Determine whether there are responsibilities to communicate matter
To third party


Discreditable acts framework...

Does not exist in the CPA profession


Accounting and consulting services do not normally impair independence because...

The member's role is advisory in nature


When a CPA contracts with a client to supervise the client's office personnel, they are...

Performing a management function which impairs independence


Due care does not require...

Obtaining specialty accreditation


Due care requires a member to discharge...

Professional responsibilities with competence and due diligence


Competence represents the...

Attainment and maintenance of level of understanding and
Knowledge that enables member to render services with facility
And acument


Due care establishes limitations of a member's capabilities by...

Dictating that consultation or referral may be required when
Professional engagement exceeds personal competence of member


A member in public practice shall not...

For a commission recommend or refer to a client a product or


A CPA can't recommend for a commission refer any...

Product or service supplied by a client


A CPA can't receive a commission when Member or member's firm perform for that client...3

1 audit of financial statements
2 Compilation of financial statement when member expects
Third party to use financial statement/report doesn't disclose
Lack of independence
3 examination of prospective financial info


A CPA may purchase a product and...

2) any profit on sale would not...

Resell it to a client

2) constitute a commission


A fully secured loan that a CPA takes from a compilation client, is considered what when they are asked to audit the client a year later?

Grandfathered (independence was not required)


If independence was not required at the time the loan was obtained from the client and the CPA is asked to perform an audit, the CPA is considered...



Of the five member board of the PCAOB...

No more than 2 members may be CPAs


The portion of the report issued on a CPA firm's quality control is...

Not ordinarily made publicly available


Most of the PCAOB report, other than the portion on quality control is...

Made available to the public


Audit reports based on international auditing standards must include...

Location where auditor practices (city, country)


Whether accounts receivable are confirmed is based on...2

1 auditor's assessed risk of material misstatement and

2 how audit evidence, from other planned audit procedures,
Reduce that risk


Identify the body that enforces the audit requirements of ERISA

Department of Labor


When compiling financial statements for a non public company for the past year and issuing a publicly available report, the CPA's...

Independence is not required


For performance of a review of a Nonpublic company's annual financial statements.

What standards provide guidance?

Statements on Standards for Accounting and Review Services


For examination of a client's financial forecast.

What standards provide guidance?

State,nets on Standards for Attestation Engagements (SSAE)