ACCT 4553 Ethics Final Part 2 UPDATED ACTUAL Questions and CORRECT
Answers
1. A member has been asked to co-sign checks with a C.) Because check-signing
client employee while the company president is on is a management func-
vacation. Which statement about the application of the tion, independence is im-
AICPA independence rules to this situation is correct? A.) Yes, but
only if
Zelada and
A.) Because the member will only be co-signing checks, Smith was
independence is not threatened. performing
other
services for
B.) Because the member has entered into a joint ven- Harris.
ture with the client, independence is impaired.
C.) Because check-signing is a management function,
independence is impaired.
D.) Because the member is a co-signer for a short time,
independence is not threatened.
2. elada and Smith, CPAs, and their client, Harris Elec-
trical, are discussing a possible advisory engagement
in which the firm would review Harris' accounts re-
ceivable system and recommend changes that would
streamline the company's collection process. Harris
will pay Zelada and Smith a fee based on improved
performance in accounts receivable collections. Would
this contingent fee arrangement raise any ethical con-
cerns under the profession's rules?
, paired.
D.) Yes, if Zelada and Smithalso performed a review engagement for Harris.
Answers
1. A member has been asked to co-sign checks with a C.) Because check-signing
client employee while the company president is on is a management func-
vacation. Which statement about the application of the tion, independence is im-
AICPA independence rules to this situation is correct? A.) Yes, but
only if
Zelada and
A.) Because the member will only be co-signing checks, Smith was
independence is not threatened. performing
other
services for
B.) Because the member has entered into a joint ven- Harris.
ture with the client, independence is impaired.
C.) Because check-signing is a management function,
independence is impaired.
D.) Because the member is a co-signer for a short time,
independence is not threatened.
2. elada and Smith, CPAs, and their client, Harris Elec-
trical, are discussing a possible advisory engagement
in which the firm would review Harris' accounts re-
ceivable system and recommend changes that would
streamline the company's collection process. Harris
will pay Zelada and Smith a fee based on improved
performance in accounts receivable collections. Would
this contingent fee arrangement raise any ethical con-
cerns under the profession's rules?
, paired.
D.) Yes, if Zelada and Smithalso performed a review engagement for Harris.
