TEST BANK FOR
AUDITING,, A
PRACTICAL
APPROACH WITH DATA
ANALYTICS, RAYMOND
N. JOHNSON, LAURA
DAVIS WILEY, ROBYN
MORONEY, FIONA
CAMPBELL, JANE
HAMILTON
, Chapter 2
Professionalism and Professional
Responsibilities
Question Type: True or False
1. The cornerstone of the public accounting profession is evidenced by the work done in
the public interest by CPAs.
A. True
B. False
Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA BB: Governance Perspective, AACSB: Ethics,
Learning Objective: LO2.1, Solution: The cornerstone of the public accounting profession is recognized in
the public interest in the work done by CPAs.
2. Both licensed tax preparers and CPA professionals have the right to sign tax returns.
A. True
B. False
Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA BB: Governance Perspective, AACSB: Ethics,
Learning Objective: LO2.1, Solution: The right to sign tax returns as a tax preparer is granted to both
licensed tax preparers and licensed CPA Professionals.
3. A professional concerned for the public interest (CPI) is defined by their professional
line of work or occupation.
A. True
B. False
Answer: B, Taxonomy: Knowledge, Difficulty: Easy, AICPA PC: Professional Behavior, AACSB: Ethics,
Learning Objective: LO2.1, Solution: In the context of an EC Professional, the profession is usually
defined by the line of work or occupation.
,4. The rules of AICPA Code of Professional Conduct are applicable to members in public
practice only.
A. True
B. False
Answer: B, Taxonomy: Knowledge, Difficulty: Easy, AICPA BB: Governance Perspective, AACSB: Ethics,
Learning Objective: LO2.2, Solution: The rules of AICPA Code of Professional Conduct are applicable to
members in public practice, those in business, and others.
5. The rules of conduct of the AICPA Code of Professional Conduct establish minimum
standards of ethical conduct in the performance of professional services.
A. True
B. False
Answer: B, Taxonomy: Knowledge, Difficulty: Easy, AICPA BB: Governance Perspective, AACSB: Ethics,
Learning Objective: LO2.2, Solution: The rules of conduct of the AICPA Code of Professional Conduct
establish minimum standards of acceptable conduct in the performance of professional services.
6. CPAs must obtain their license from State Boards of Accountancy.
A. True
B. False
Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA BB: Governance Perspective, AACSB: Ethics,
Learning Objective: LO2.2, Solution: CPAs must obtain their license from State Boards of Accountancy,
irrespective of whether they are members of the AICPA or not.
7. An adverse interest threat is a threat that a CPA will not act with objectivity because the
CPA’s interests are opposed to the client’s interests.
A. True
B. False
Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA PC: Decision Making, AACSB: Ethics,
Learning Objective: LO2.3, Solution: An adverse interest threat is a threat that a CPA will not act with
objectivity because the CPA’s interests are opposed to the client’s interests.
, 8. Of the three basic types of safeguards, the first is the safeguards implemented by a
client.
A. True
B. False
Answer: B, Taxonomy: Knowledge, Difficulty: Easy, AICPA PC: Decision Making, AACSB: Ethics,
Learning Objective: LO2.3, Solution: In three basic types of safeguards, the first is safeguards created by
the profession (e.g., the safeguards suggested in the rules of the code of conduct, legislation, or
regulation).
9. CPAs should evaluate identified threats individually only.
A. True
B. False
Answer: B, Taxonomy: Knowledge, Difficulty: Easy, AICPA PC: Decision Making, AACSB: Ethics,
Learning Objective: LO2.3, Solution: CPAs should evaluate identified threats both individually and in
aggregate.
10. According to the integrity and objectivity rule, a member need not be free of conflict of
interest.
A. True
B. False
Answer: B, Taxonomy: Knowledge, Difficulty: Easy, AICPA PC: Decision Making, AACSB: Ethics,
Learning Objective: LO2.4, Solution: According to the integrity and objectivity rule, a member should be
free of conflict of interest.
11. The rule on integrity and objectivity applies to all services performed by CPAs.
A. True
B. False
Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA PC: Decision Making, AACSB: Ethics,
Learning Objective: LO2.4, Solution: The rule on integrity and objectivity applies to all services performed
by CPAs, including tax, audit, bookkeeping, and consulting services.
AUDITING,, A
PRACTICAL
APPROACH WITH DATA
ANALYTICS, RAYMOND
N. JOHNSON, LAURA
DAVIS WILEY, ROBYN
MORONEY, FIONA
CAMPBELL, JANE
HAMILTON
, Chapter 2
Professionalism and Professional
Responsibilities
Question Type: True or False
1. The cornerstone of the public accounting profession is evidenced by the work done in
the public interest by CPAs.
A. True
B. False
Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA BB: Governance Perspective, AACSB: Ethics,
Learning Objective: LO2.1, Solution: The cornerstone of the public accounting profession is recognized in
the public interest in the work done by CPAs.
2. Both licensed tax preparers and CPA professionals have the right to sign tax returns.
A. True
B. False
Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA BB: Governance Perspective, AACSB: Ethics,
Learning Objective: LO2.1, Solution: The right to sign tax returns as a tax preparer is granted to both
licensed tax preparers and licensed CPA Professionals.
3. A professional concerned for the public interest (CPI) is defined by their professional
line of work or occupation.
A. True
B. False
Answer: B, Taxonomy: Knowledge, Difficulty: Easy, AICPA PC: Professional Behavior, AACSB: Ethics,
Learning Objective: LO2.1, Solution: In the context of an EC Professional, the profession is usually
defined by the line of work or occupation.
,4. The rules of AICPA Code of Professional Conduct are applicable to members in public
practice only.
A. True
B. False
Answer: B, Taxonomy: Knowledge, Difficulty: Easy, AICPA BB: Governance Perspective, AACSB: Ethics,
Learning Objective: LO2.2, Solution: The rules of AICPA Code of Professional Conduct are applicable to
members in public practice, those in business, and others.
5. The rules of conduct of the AICPA Code of Professional Conduct establish minimum
standards of ethical conduct in the performance of professional services.
A. True
B. False
Answer: B, Taxonomy: Knowledge, Difficulty: Easy, AICPA BB: Governance Perspective, AACSB: Ethics,
Learning Objective: LO2.2, Solution: The rules of conduct of the AICPA Code of Professional Conduct
establish minimum standards of acceptable conduct in the performance of professional services.
6. CPAs must obtain their license from State Boards of Accountancy.
A. True
B. False
Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA BB: Governance Perspective, AACSB: Ethics,
Learning Objective: LO2.2, Solution: CPAs must obtain their license from State Boards of Accountancy,
irrespective of whether they are members of the AICPA or not.
7. An adverse interest threat is a threat that a CPA will not act with objectivity because the
CPA’s interests are opposed to the client’s interests.
A. True
B. False
Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA PC: Decision Making, AACSB: Ethics,
Learning Objective: LO2.3, Solution: An adverse interest threat is a threat that a CPA will not act with
objectivity because the CPA’s interests are opposed to the client’s interests.
, 8. Of the three basic types of safeguards, the first is the safeguards implemented by a
client.
A. True
B. False
Answer: B, Taxonomy: Knowledge, Difficulty: Easy, AICPA PC: Decision Making, AACSB: Ethics,
Learning Objective: LO2.3, Solution: In three basic types of safeguards, the first is safeguards created by
the profession (e.g., the safeguards suggested in the rules of the code of conduct, legislation, or
regulation).
9. CPAs should evaluate identified threats individually only.
A. True
B. False
Answer: B, Taxonomy: Knowledge, Difficulty: Easy, AICPA PC: Decision Making, AACSB: Ethics,
Learning Objective: LO2.3, Solution: CPAs should evaluate identified threats both individually and in
aggregate.
10. According to the integrity and objectivity rule, a member need not be free of conflict of
interest.
A. True
B. False
Answer: B, Taxonomy: Knowledge, Difficulty: Easy, AICPA PC: Decision Making, AACSB: Ethics,
Learning Objective: LO2.4, Solution: According to the integrity and objectivity rule, a member should be
free of conflict of interest.
11. The rule on integrity and objectivity applies to all services performed by CPAs.
A. True
B. False
Answer: A, Taxonomy: Knowledge, Difficulty: Easy, AICPA PC: Decision Making, AACSB: Ethics,
Learning Objective: LO2.4, Solution: The rule on integrity and objectivity applies to all services performed
by CPAs, including tax, audit, bookkeeping, and consulting services.
