CPA Exam Becker Audit 6 Questions
with Complete Solutions.
Who can revoke/suspend your CPA license? - Answer The state board
What services does the AICPA Code of Professional Conduct govern? - Answer Any service that
a member of the AICPA performs.
T or F: The AICPA code of conduct only applies to members in public practice. - Answer F: It
applies to all members of the AICPA
What are the six principles of the AICPA Code of Professional Conduct? - Answer 1.
Responsibilities
2. Public Interest
3. Integrity
4. Objectivity and Independence
5. Due Care
6. Scope and Nature of Services
_________ applies to all services rendered but ___________ applies to attestation services only
(audits, special reports (examining a financial forecast), and reviews). - Answer Objectivity,
independence
What does due care mean? - Answer No negligence
What are the 11 rules of the code? - Answer 1. Independence Rule
2. Integrity and Objectivity Rule
3. General Standards Rule
4. Compliance with Standards Rule
5. Accounting Principles Rule
6. Confidential Client Information Rule
7. Contingent Fees Rule
8. Acts Discreditable Rule
9. Advertising and Other Forms of Solicitation Rule
10. Commissions and Referral Fees Rule
11. Form of Organization and Name Rule
, Which of the 11 rules apply to AICPA members in public practice? - Answer All Rules
Which of the 11 rules apply to AICPA members in business? - Answer Integrity and Objectivity
Rule, General Standards Rule, Compliance with Standards Rule, Accounting Principles Rule, and
the Acts Discreditable Rule.
Which of the 11 rules apply to "other AICPA members (i.e. retired or unemployed?" - Answer
The Acts Discreditable Rule
Know chart on pg. 4. - Answer OK
Covered members consist of: - Answer the audit team and boss/office "chain of command"
With respect to independence, immediate family consists of: - Answer spouse and dependents
With respect to independence, close relatives consist of: - Answer parents, siblings, and adult
kids
T or F: Covered members must maintain independence but their immediate families are
generally exempt from the rule. - Answer F: Covered members must maintain independence
and their immediate families are also generally subject to the rule.
With respect to financial interests, when is a covered members independence impaired? -
Answer Independence is impaired if a covered member has a direct financial interest
(REGARDLESS OF MATERIALITY) or a material indirect financial interest in an attestation client.
T or F: Stock ownership, unless owned in a blind trust, is an example of a direct financial
interest. - Answer F: Stock ownership, EVEN if owned in a blind trust, is an example of a direct
financial interest.
Review financial interest example on pg. 5 - Answer OK
Independence is impaired by a close relative if a close relative has a financial interest in the
attest client ___________. - Answer that the covered member knows is material to the close
relative or enabled the close relative to exercise significant influence over the attest client.
If a firm has a financial institution client, what four types of relationships are OK? - Answer 1.
Fully collateralized car loans with a financial institution client
with Complete Solutions.
Who can revoke/suspend your CPA license? - Answer The state board
What services does the AICPA Code of Professional Conduct govern? - Answer Any service that
a member of the AICPA performs.
T or F: The AICPA code of conduct only applies to members in public practice. - Answer F: It
applies to all members of the AICPA
What are the six principles of the AICPA Code of Professional Conduct? - Answer 1.
Responsibilities
2. Public Interest
3. Integrity
4. Objectivity and Independence
5. Due Care
6. Scope and Nature of Services
_________ applies to all services rendered but ___________ applies to attestation services only
(audits, special reports (examining a financial forecast), and reviews). - Answer Objectivity,
independence
What does due care mean? - Answer No negligence
What are the 11 rules of the code? - Answer 1. Independence Rule
2. Integrity and Objectivity Rule
3. General Standards Rule
4. Compliance with Standards Rule
5. Accounting Principles Rule
6. Confidential Client Information Rule
7. Contingent Fees Rule
8. Acts Discreditable Rule
9. Advertising and Other Forms of Solicitation Rule
10. Commissions and Referral Fees Rule
11. Form of Organization and Name Rule
, Which of the 11 rules apply to AICPA members in public practice? - Answer All Rules
Which of the 11 rules apply to AICPA members in business? - Answer Integrity and Objectivity
Rule, General Standards Rule, Compliance with Standards Rule, Accounting Principles Rule, and
the Acts Discreditable Rule.
Which of the 11 rules apply to "other AICPA members (i.e. retired or unemployed?" - Answer
The Acts Discreditable Rule
Know chart on pg. 4. - Answer OK
Covered members consist of: - Answer the audit team and boss/office "chain of command"
With respect to independence, immediate family consists of: - Answer spouse and dependents
With respect to independence, close relatives consist of: - Answer parents, siblings, and adult
kids
T or F: Covered members must maintain independence but their immediate families are
generally exempt from the rule. - Answer F: Covered members must maintain independence
and their immediate families are also generally subject to the rule.
With respect to financial interests, when is a covered members independence impaired? -
Answer Independence is impaired if a covered member has a direct financial interest
(REGARDLESS OF MATERIALITY) or a material indirect financial interest in an attestation client.
T or F: Stock ownership, unless owned in a blind trust, is an example of a direct financial
interest. - Answer F: Stock ownership, EVEN if owned in a blind trust, is an example of a direct
financial interest.
Review financial interest example on pg. 5 - Answer OK
Independence is impaired by a close relative if a close relative has a financial interest in the
attest client ___________. - Answer that the covered member knows is material to the close
relative or enabled the close relative to exercise significant influence over the attest client.
If a firm has a financial institution client, what four types of relationships are OK? - Answer 1.
Fully collateralized car loans with a financial institution client
