ACC 480 Chapter 19 Exam Questions With 100% Correct Answers.

ACC 480 Chapter 19 Exam Questions With 100% Correct Answers. The term "ethics" refers to a person's propensity to follow the laws of the land. - answerFalse Professionalism refers to the conduct, aims, or qualities that characterize a given profession. - answerTrue When auditing a public company, a CPA must follow the auditing standards and Code of Professional Conduct of the PCAOB. - answerTrue The AICPA Code of Professional Conduct guidance starts at a conceptual level with the principles and progressively moves to general rules and then to detailed interpretation. - answerTrue The Principles of Professional Conduct set forth the minimum standards. - answerFalse Rules of Conduct are enforceable. - answerTrue Interpretations of Rules of Conduct are enforceable. - answerFalse Principles are stated at a conceptual level, not a detailed level. - answerTrue The rules contained in Section 1.100 cover issues relating to independence, integrity, and auditing standards. - answerFalse If an auditor is not independent of the client, it is unlikely that a user of financial statements will place much reliance on the CPA's work. - answerTrue As per the Conceptual Framework for AICPA Independence Standards, a CPA is required to identify and assess the extent to which a threat to independence exists. - answerTrue An indirect financial interest is defined as a financial interest that is owned or is under the control of an individual or entity. - answerFalse A financial interest is "beneficially owned" when an individual or entity is NOT the recorded owner of the interest but has a right to some or all of the underlying benefits of ownership. - answerTrue If a CPA owns an insurance policy issued by an attest client, independence would be considered impaired, even if the policy was purchased under the insurance company's normal terms and procedures and does not offer an investment option. - answerFalse The independence standards issued by the PCAOB do not prohibit the provision of tax services to an attest client. - answerTrue PCAOB rules require tax services provided by a public company auditor to be considered and approved by the company's audit committee. - answerTrue With respect to ethics, the rights-based approach: A) suggests that auditors should always verify ownership of a client's material tangible assets. B) is primarily concerned with equity and impartiality. C) suggests that an individual's actions should not violate the rights of any individual. D) recognizes that decisions involve trade-offs between costs and benefits. - answerC) suggests that an individual's actions should not violate the rights of any individual. With respect to ethics, the utilitarian theory: A) suggests that auditors should always verify ownership of a client's material tangible assets. B) is primarily concerned with equity and impartiality. C) suggests that an individual's actions should not violate the rights of any individual. D) recognizes that decisions involve trade-offs between costs and benefits. - answerD) recognizes that decisions involve trade-offs between costs and benefits. With respect to ethics, the justice-based approach: A) suggests that auditors should always verify ownership of a client's material tangible assets. B) is primarily concerned with equity and impartiality. C) suggests that an individual's actions should not violate the rights of any individual. D) recognizes that decisions involve trade-offs between costs and benefits. - answerB) is primarily concerned with equity and impartiality. In auditing a publicly held company, an auditor must follow the professional standards established by all of the following except: A) the AICPA's Auditing Standards Board. B) the SEC Independence Rules. C) the PCAOB Code of Professional Conduct. D) the PCAOB Auditing Standards. - answerA) the AICPA's Auditing Standards Board. Which of the following is not a Principle of Professional Conduct as defined by the Code of Professional Conduct? A) Integrity. B) Due care. C) Reporting. D) Scope and nature of services. - answerC) Reporting. For private companies, accounting firms are prohibited from providing: A) outsourced internal audit services.