D215 Auditing, Pre-test
1.
Which type of work performed by a CPA is an attestation service?
Risk advisory
Website security assurance
Data integrity
Financial statement review - ANSFinancial statement review
2.
Which entity may obtain audited financial statements to ensure a company is complying with
industry regulations?
Lenders
Consumers
Governments
General public - ANSGovernments
3.
Which group performs an audit and review of financial statements to ensure financial statement
users' needs are met?
Internal auditors
The Internal Revenue Service (IRS)
Independent third-party auditors
The Financial Accounting Standards Board (FASB) - ANSIndependent third-party auditors
4.
Which type of report should be issued if an auditor has determined that a company has
maintained effective internal controls over financial reporting for the period under audit?
Adverse
Qualified
Disclaimer
Unqualified - ANSUnqualified
5.
A new CPA is aware of how accounting affects stakeholders.
Which characteristic of professionalism is motivating this awareness?
,Level of expertise
Advanced certification
Professional judgment
Concern for the public interest - ANSConcern for the public interest
6.
Which component of the AICPA Code of Professional Conduct provides the tenets of ethical
conduct that govern the professional responsibility of its members?
Morals
Principles
Interpretations
Rules of conduct - ANSPrinciples
7.
A CPA firm provides tax services for a large automotive client. Over the years, the client has
continually pushed for aggressive tax strategies that the CPA does not always agree with.
While performing the current year tax return, the client threatens to discontinue the relationship
with the CPA firm if they continue to disagree with the strategies presented.
Which type of threat to ethical decision-making is demonstrated by this practice?
Self-review
Self-interest
Adverse interest
Undue influence - ANSUndue influence
8.
A CPA has prepared a couple's joint tax returns for 10 years, but the couple is now experiencing
a complicated divorce where both parties wish to claim the same child as a dependent. The
CPA agrees to work with both clients on their tax returns.
Which standard of the AICPA Code of Professional Conduct is being violated by this CPA's
action?
Independence
Contingent Fees
Accounting Principles
Integrity and Objectivity - ANSIntegrity and Objectivity
9.
, A large client asks a CPA firm for consulting help with their quarterly sales and use tax reporting.
The CPA firm specializes in audit and tax preparation and has not dealt with this type of work in
the past but would like to add it. The firm decides to accept the job.
Which step is required to maintain compliance with the general standards of the AICPA Code of
Professional Conduct?
The CPA firm must send the CPAs to a continuing professional education course on sales and
use tax reporting.
The CPA firm must be independent of the client to perform consulting services on sales and use
tax reports.
The CPA firm must develop this line of work by adding additional clients who need assistance
with sales and use tax reports.
The CPA firm must collect sufficient relevant data to complete sales and use tax reports. -
ANSThe CPA firm must send the CPAs to a continuing professional education course on sales
and use tax reporting.
10.
A junior accountant is providing tax and audit services to a large company that is pressuring the
accountant to reduce the amount of taxes the company owes. The junior accountant decides to
use last year's tax laws instead of the current year's laws since the older laws will save the
company money.
Which general standard of the AICPA Code of Professional Conduct is the junior accountant
violating?
Due Professional Care
Sufficient Relevant Data
Planning and Supervision
Professional Competence - ANSDue Professional Care
11.
A CPA firm has been retained to audit a client's financial statements. The client's bank has
requested audited financial statements in order to approve or deny a loan to the client. The
client has suggested that the CPA firm will earn a $20,000 bonus if the bank grants the loan to
the client.
Which statement characterizes the permissibility of this fee structure?
The CPA will need to obtain a ruling letter from the AICPA before agreeing to this fee structure.
This fee structure is not permitted under ethical standards applicable to the auditing profession.
The CPA will need to obtain written permission from the client's bank before agreeing to this fee
structure.
1.
Which type of work performed by a CPA is an attestation service?
Risk advisory
Website security assurance
Data integrity
Financial statement review - ANSFinancial statement review
2.
Which entity may obtain audited financial statements to ensure a company is complying with
industry regulations?
Lenders
Consumers
Governments
General public - ANSGovernments
3.
Which group performs an audit and review of financial statements to ensure financial statement
users' needs are met?
Internal auditors
The Internal Revenue Service (IRS)
Independent third-party auditors
The Financial Accounting Standards Board (FASB) - ANSIndependent third-party auditors
4.
Which type of report should be issued if an auditor has determined that a company has
maintained effective internal controls over financial reporting for the period under audit?
Adverse
Qualified
Disclaimer
Unqualified - ANSUnqualified
5.
A new CPA is aware of how accounting affects stakeholders.
Which characteristic of professionalism is motivating this awareness?
,Level of expertise
Advanced certification
Professional judgment
Concern for the public interest - ANSConcern for the public interest
6.
Which component of the AICPA Code of Professional Conduct provides the tenets of ethical
conduct that govern the professional responsibility of its members?
Morals
Principles
Interpretations
Rules of conduct - ANSPrinciples
7.
A CPA firm provides tax services for a large automotive client. Over the years, the client has
continually pushed for aggressive tax strategies that the CPA does not always agree with.
While performing the current year tax return, the client threatens to discontinue the relationship
with the CPA firm if they continue to disagree with the strategies presented.
Which type of threat to ethical decision-making is demonstrated by this practice?
Self-review
Self-interest
Adverse interest
Undue influence - ANSUndue influence
8.
A CPA has prepared a couple's joint tax returns for 10 years, but the couple is now experiencing
a complicated divorce where both parties wish to claim the same child as a dependent. The
CPA agrees to work with both clients on their tax returns.
Which standard of the AICPA Code of Professional Conduct is being violated by this CPA's
action?
Independence
Contingent Fees
Accounting Principles
Integrity and Objectivity - ANSIntegrity and Objectivity
9.
, A large client asks a CPA firm for consulting help with their quarterly sales and use tax reporting.
The CPA firm specializes in audit and tax preparation and has not dealt with this type of work in
the past but would like to add it. The firm decides to accept the job.
Which step is required to maintain compliance with the general standards of the AICPA Code of
Professional Conduct?
The CPA firm must send the CPAs to a continuing professional education course on sales and
use tax reporting.
The CPA firm must be independent of the client to perform consulting services on sales and use
tax reports.
The CPA firm must develop this line of work by adding additional clients who need assistance
with sales and use tax reports.
The CPA firm must collect sufficient relevant data to complete sales and use tax reports. -
ANSThe CPA firm must send the CPAs to a continuing professional education course on sales
and use tax reporting.
10.
A junior accountant is providing tax and audit services to a large company that is pressuring the
accountant to reduce the amount of taxes the company owes. The junior accountant decides to
use last year's tax laws instead of the current year's laws since the older laws will save the
company money.
Which general standard of the AICPA Code of Professional Conduct is the junior accountant
violating?
Due Professional Care
Sufficient Relevant Data
Planning and Supervision
Professional Competence - ANSDue Professional Care
11.
A CPA firm has been retained to audit a client's financial statements. The client's bank has
requested audited financial statements in order to approve or deny a loan to the client. The
client has suggested that the CPA firm will earn a $20,000 bonus if the bank grants the loan to
the client.
Which statement characterizes the permissibility of this fee structure?
The CPA will need to obtain a ruling letter from the AICPA before agreeing to this fee structure.
This fee structure is not permitted under ethical standards applicable to the auditing profession.
The CPA will need to obtain written permission from the client's bank before agreeing to this fee
structure.
