Ethics in Accounting Chapter 4 Exam #1 Questions with Correct
Answers
Among the safeguards provided in the AICPA Code for Members in Business, the
one missing at Valley View is most likely which of the following? - ✔✔Tone at the
top
George has been asked by his audit client to provide income tax services including
tax planning. Prior to providing such services, George should be certain that: -
✔✔He assesses threats to independence
In Case 4-6, Tax Shelters, the largest fine for marketing abusive tax shelters was
levied on ____________ for $_________________. - ✔✔KPMG, 456 million
A conflict of interest exists when: - ✔✔A professional service or relationship
creates a situation that might impair objective judgment
Ethical conflicts for CPAs in business can occur when:
A) Relationships exist with vendors
B)Threats from higher levels of management create constraints to providing
accurate and reliable financial statements
C)Obstacles exist to complying with professional and legal standards
D)All of the above - ✔✔D)All of the above
The PCAOB rules prohibit auditors from:
A)Providing tax preparation and planning services for public company executives
B)Providing tax services to members of the audit client's management who serve
in financial reporting oversight roles
, C)Providing certain aggressive tax shelters to their public company audit clients
D)All of the above - ✔✔All of the above
Statement on Standards for Tax Services No. 1 establishes as a basic principle of
providing tax services that the CPA: - ✔✔Must have a good faith belief that the
tax return position has a realistic possibility of success if challenged by the IRS
The applicable section to Helen's situation in the conceptual framework rules for
CPAs in business would be which of the following? - ✔✔2.000.010
To prevent subordination of judgment, a CPA should evaluate threats to: -
✔✔Objectivity and Integrity
Diane is a CFO at We Do What We Want, Inc. She was just instructed by her boss,
the CEO, to accelerate the recording of revenue into an earlier year to meet
financial analysts' earnings projections. In order to meet the ethical standards of
the accounting profession, Diane must be certain that she: - ✔✔Works through
the chain of command within the company to avoid subordinating judgment
The AOL-Time Warner case deals with: - ✔✔Whether a whistleblower was a hero
or villain
Which of the following is NOT an example of a conflict of interest? - ✔✔Accepting
commissions in a financial planning engagement for a nonaudit client
Answers
Among the safeguards provided in the AICPA Code for Members in Business, the
one missing at Valley View is most likely which of the following? - ✔✔Tone at the
top
George has been asked by his audit client to provide income tax services including
tax planning. Prior to providing such services, George should be certain that: -
✔✔He assesses threats to independence
In Case 4-6, Tax Shelters, the largest fine for marketing abusive tax shelters was
levied on ____________ for $_________________. - ✔✔KPMG, 456 million
A conflict of interest exists when: - ✔✔A professional service or relationship
creates a situation that might impair objective judgment
Ethical conflicts for CPAs in business can occur when:
A) Relationships exist with vendors
B)Threats from higher levels of management create constraints to providing
accurate and reliable financial statements
C)Obstacles exist to complying with professional and legal standards
D)All of the above - ✔✔D)All of the above
The PCAOB rules prohibit auditors from:
A)Providing tax preparation and planning services for public company executives
B)Providing tax services to members of the audit client's management who serve
in financial reporting oversight roles
, C)Providing certain aggressive tax shelters to their public company audit clients
D)All of the above - ✔✔All of the above
Statement on Standards for Tax Services No. 1 establishes as a basic principle of
providing tax services that the CPA: - ✔✔Must have a good faith belief that the
tax return position has a realistic possibility of success if challenged by the IRS
The applicable section to Helen's situation in the conceptual framework rules for
CPAs in business would be which of the following? - ✔✔2.000.010
To prevent subordination of judgment, a CPA should evaluate threats to: -
✔✔Objectivity and Integrity
Diane is a CFO at We Do What We Want, Inc. She was just instructed by her boss,
the CEO, to accelerate the recording of revenue into an earlier year to meet
financial analysts' earnings projections. In order to meet the ethical standards of
the accounting profession, Diane must be certain that she: - ✔✔Works through
the chain of command within the company to avoid subordinating judgment
The AOL-Time Warner case deals with: - ✔✔Whether a whistleblower was a hero
or villain
Which of the following is NOT an example of a conflict of interest? - ✔✔Accepting
commissions in a financial planning engagement for a nonaudit client
