question

Metcalf committee

answer

The committee that first recommended that the profession institute a voluntary program for peer review was:

question

Where were the auditors

answer

During the investigations by the House Subcommittee on Oversight and Investigations, a question that was raised was:

question

How the company was able to create 80% or more fictitious revenue

answer

In its investigation of ZZZZ Best, the House Subcommittee on Oversight and Investigations looked into:

question

$152.9 billion including $123.8 billion of U.S. taxpayer losses

answer

The cost to the public to clean up 1,043 failed savings and loan institutions during the period of 1986- 1995 was:

question

1. The failure to provide adequate allowances for loan losses 2. The failure to disclose dubious deals between the S&Ls and some of its major customers 3. The existence of inadequate controls to prevent inadequate allowances and control for dubious deals

answer

The accounting issues at failed savings and loan institutions included:

question

To identify the tone at the top for management to create an ethical culture

answer

One of the Contributions of the Treadway Commission Report and the work of the Committee of Sponsoring Organizations (COSO) was:

question

Pressure to meet financial analysts' earnings estimates

answer

One concern in the Armadillo Foods case in the text of the chapter is:

question

Valuations and end-of-period transactions

answer

James Doty, the chairman of the PCAOB, in his testimony before Congress on the financial crisis of 2007-2008, admitted that auditors should have been more vigilant—not just at Lehman Brothers, but across the board. Which audit areas did Doty signal out for criticism?

question

State board of accountancy

answer

CPAs should always adhere to the rules of conduct of the

question

Independence

answer

The ethics rules that applies solely to those who conduct an audit of a client entity is:

question

Integrity

answer

The principle of ethical behavior in the AICPA Code that asks questions directly related to ethical courage is:

question

1. A CPA owns a direct financial interest in a client 2. A CPA owns a material indirect financial interest in a client 3. Immediate family members of the CPA are in violation of the independence rules

answer

Impairments of independence can occur when:

question

Had loans outstanding from the clien

answer

In the ESM fraud discussed in this chapter, Jose Gomez violated the Independence standard because he:

question

The auditor serves in a management decision making position with the client

answer

Assume the external auditor of a client entity also served on the client's board of directors. What aspect of independence would be violated?

question

The auditor was involved in a business relationship with the client

answer

In the PeopleSoft case, the auditors violated what aspect of independence?

question

Avoid being biased when providing nonattest services for the audit client

answer

To avoid violating independence when engaged in nonattest services for an audit client, a CPA must:

question

Tax services

answer

Each of the following is an outright restriction on providing nonattest services for an attest client except for:

question

Top management certified that the financial statements were accurate

answer

A unique aspect of the HealthSouth case discussed in the text of this chapter is:

question

Addresses the quality of services performed by the CPA

answer

The due care principle in the AICPA code:

question

Independence

answer

Which rule of professional conduct in the AICPA code does not apply both to internal and external accountants who are CPAs and members of the Institute?

question

1. In response to a validly issued court summons 2. To provide information to the CPA's peer reviewers 3. To defend oneself in an ethics investigation

answer

The confidentiality standard in the AICPA code provides for exceptions to the rule in:

question

The CPA informed the client of this matter and the client did not inform the SEC within one business day of being informed by the CPA

answer

A CPA who informs management of a material misstatement in the financial statements can go to the SEC with his/her concerns if:

question

The auditor is unable to observe the physical inventory

answer

If a client refuses to accept an auditors' report that has been modified, the public accounting firm should withdraw from the engagement and give its reasons in writing to the board of directors except when:

question

There is a realistic possibility of success if the tax position is challenged

answer

The requirement that there should be reasonable support for a tax return position before a CPA recommends it to a client most directly aligns with which tax standard:

question

Public interest

answer

To whom does the CPA owe ultimate allegiance in carrying out professional obligations?

question

Those CPAs in public accounting, industry, government, and education.

answer

To whom do the accounting codes of professional conduct (either the state board of public accountancy or AICPA) apply?

question

Have I retained my integrity?

answer

Integrity is measured in terms of what is right and just. What is a question that a CPA can ask to test decisions?

question

It would be a conflict of interest and violates ethical standards.

answer

Why don't auditors prepare financial statements, as well as audit them?

question

The CPA serves on the board of a non-profit with the CFO of the company being audited.

answer

In which of the following is a CPA independent in fact and appearance?

question

Audit documentation obtained by the auditor with reviews by supervisory personnel.

answer

Which of the following would be an example of due care?

question

Relationships where a best friend serves in a financial reporting oversight role with the client

answer

Which of the following relationships do not impair CPA-auditor independence?

question

Safeguards developed to ensure independence when performing nonattest service

answer

Each of the following is a safeguard that helps to mitigate threats to independence except for:

question

Car loan collateralized by the car

answer

Which of the following is a permitted loan to a CPA from an audit client financial institution?

question

ESM Government Securities

answer

Which case in the text of the chapter illustrates the danger of a CPA accepting loans from an audit client?

question

CPA's uncle

answer

Which of the following immediate family members or close relatives would not have to follow the independence rules that apply to the CPA according to Interpretation 101-1?

question

CPA's nephew is starting as a salesperson with an audit client.

answer

Which of the following situations of a CPA's distant relatives does not impair the CPA's independence?

question

10 HOURS

answer

What is the maximum amount of time an audit manager or partner may spend on nonattest services for an attest client?

question

Internal audit outsourcing services

answer

Which of the following services are allowed to be performed for an attest services client by Sarbanes Oxley Act?

question

Professional data

answer

Which of the following is not part of standards for the quality of work?

question

The PCAOB prohibits contingent fees in tax engagements performed for an audit client.

answer

What is the difference on contingent fees under the PCAOB rules versus the AICPA rules?

question

Corporation

answer

Which is not a permitted form of organization for a CPA practice?

question

Auditing of deferred taxes

answer

Which tax service is still permitted by the PCAOB for audit clients following the KPMG tax shelter case?

question

Confidentiality and integrity

answer

What ethical rules are violated when a CPA auditing a client provides inside information about the client to a friend?

question

Client-provided records in the custody or control of the CPA should be returned to the client at the client's request.

answer

Which statement is correct with respect to a CPA's ethical obligation to return client books and records and CPA work papers:

question

Fund of Funds

answer

The ethical issue raised in the Beauda Medical Center case is similar to that in:

question

There has been a misappropriation of assets

answer

The question that arises in the First Community Church case is whether:

question

Report the situation to the firm's oversight or similar committee.

answer

In the Lee & Han, LLC case, Barbara Strom should:

question

Talk to the agency's board of directors

answer

In the Family Outreach case, Yimei finds three accounts all using the same documentation and amounts. Being skeptical, Yimei should consider doing all but:

question

Inflating healthcare costs submitted to Medicare.

answer

The main ethical issue in Healthcare Fraud case is:

question

1. Reporting systems that relied on self-reporting of violations 2. Ownership of client stock 3. Investments by PwC professionals in bank accounts of audit clients

answer

PricewaterhouseCoopers was investigated by the SEC for independence violations due to:

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