Professional Responsibility

Question 1

Discreditable rules

Answer 1

Failure to follow stds
Negligence
Failure to timely file personal tax return or firm tax return
Failure to follow Reg requirements
False marketing &adversting
Disclosure of confidential info of clients without consent

Question 2

Confidential client rule

Answer 2

Not disclose without consent unless:
Requested by Court subpoena or Summons
Quality Review or Peer review
Response inquiry by Trial Board of Aicpa or State Cpa Society
Legal Defense Team if client sues the member

Question 3

Independence is not impaired if

Answer 3

Fully collateralizes loan with financial intuition client

Cash advance & cr card balance

Question 4

Independence is impaired if

Answer 4

Covered member has:
Direct financial interest regardless of materiality: own stock…
Indirect material financial interest to clients
Auditor’s immediate family member & close relative has financial interest with clients
Make management decision for an Attest client
Immediate family member is employed with client in a key position
Seeking or discussing potential employment with client

Question 5

Contingent fees

Answer 5

Not allowed unless it is fixed by court

Question 6

Quality control is HELP ME

Answer 6

Human resources
Engagement client acceptance & continuance
Leadership responsibilities
Performance of the engagement
Monitoring
Ethical requirement

Question 7

Not required financial expert

Answer 7

Financial expert need not have significant audit experience as aCPA

Question 8

PCAOB inspections

Answer 8

Inspections may include consideration of aspects of practice mgt such as how partner compensation is determined

Question 9

Objective of engagement performance element of Quality Control

Answer 9

Engagement are adequately supervised

Question 10

IAASB pronouncement address

Answer 10

Review
Audit
Other assurances
Related engagements
Quality control

Question 11

Violated professional ethical stds

Answer 11

Issues a report on a financial forecast that omitted a caution regarding achievability

Question 12

IAS, risk assessment stage of an audit

Answer 12

Auditor considers whether there are events or conditions that cast significant doubt ab entity’s ability to continue as a going concern

Question 13

DOL conducts its financial & performance audits

Answer 13

Following GAS includes:
Compliance with laws
Evaluation of economy & efficiency of operations
Evaluation of effectiveness in achieving program results

Question 14

System of quality control

Answer 14

Provide a CPA firm with reasonable assurance that is conforming to GAAS or professional standards

Question 15

Cover member

Answer 15

Ind on the attest engagement team
Ind in position to influence the attest engagement team
Partner/manager provide non-attest service to the attest client >10hrs within any fiscal yr and ending later of the date report signed
Partner lead attest engagement
Firm’s employee benefit plans
Entity operating financing &accting can be controlled

Question 16

Least establish broad safeguards for subsequent yr audit

Answer 16

Safeguard created by peers who performed the audit in the prior yr

Question 17

Commission may be received if not provided by clients that CPA provides:

Answer 17

Audit &review FS
Compilation of FS expected relied upon by 3rd party
Examination of prospective FS

Contingent fee not allowed for preparing initial or amended tax return

Question 18

3 types of impairment of independence of GAO

Answer 18

Personal
External
Organizational

Question 19

QC:Engagement performance

Answer 19

Establish policies and procedures to provide reasonable assurance that engagements are performed in accordance with appropriate stds and appropriate reports are issued