国际双语审计第四章练习题

57. (SOX) medium b 58. medium a 59. medium c 60. medium b

61.

challenging b

62.

challenging a 63.

challenging a

The Sarbanes-Oxley Act requires a cooling off period of how long before a member of an audit team can work for a client in a key management position? a. Eighteen months. b. Twelve months. c. Thirty six months.

d. It is not specified; rather it is left to the auditor’s discretion.

In determining independence with respect to any audit engagement, the ultimate decision as to whether or not the auditor is independent must be made by the: a. auditor. b. client.

c. audit committee. d. public.

A CPA firm should decline an offer to perform management advisory services engagement if: a. the proposed engagement is not accounting-related.

b. recommendations made by the CPA firm are to be subject to review by the client.

c. acceptance would require the CPA firm to make management decisions for an audit client. d. any of the above is true.

In which of the following circumstances would a CPA be bound by ethics to refrain from disclosing any confidential information about a client?

a. The CPA is issued a summons enforceable by a court order which orders the CPA to

present confidential information.

b. A major stockholder of a client company seeks accounting information from the CPA after

management declined to disclose the requested information.

c. Confidential client information is made available as part of a quality review of the CPA’s

practice by a peer review team authorized by the AICPA.

d. An inquiry by a disciplinary body of a state CPA society requests confidential client

information.

Companies are required to disclose in their proxy statement or annual filings with the SEC the total amount of audit and non-audit fees paid to the audit firm for the two most recent years. Which of the following is not one of the categories of fees that must be disclosed? a. “Tax fees”

b. “Consulting fees” c. “Audit-related fees” d. “All other fees”

Four of the six Ethical Principles in the AICPA’s Code of Professional Conduct are equally applicable to all members of the AICPA. Which of the following principles applies only to members in public practice?

a. Scope and Nature of Services. b. Integrity. c. Due Care.

d. The Public Interest.

Interpretations of the AICPA Code of Professional Conduct are dominated by the concept of: a. independence.

b. compliance with standards. c. accounting.

d. acts discreditable to the profession.

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64.

challenging c 65.

challenging d 66.

challenging d 67.

challenging c 68.

challenging b

69. (SOX) challenging b

70.

challenging a

An audit committee, consisting of members of the client’s board of directors who are not a part of company management, is required for all companies: a. that have audits performed by AICPA member firms. b. that must file 10-K reports with the SEC. c. listed on the New York Stock Exchange. d. in all circumstances.

The Code of Professional Conduct is established by the membership of the AICPA, and the Interpretations of the Rules of Conduct are prepared by the: a. Financial Accounting Standards Board. b. Securities and Exchange Commission. c. CPA licensing agencies within each state. d. Division of Professional Ethics of the AICPA.

Generally, loans between a CPA firm or its members and an audit client are prohibited because they create a financial relationship. Which of the following is not an exception to this rule? a. Automobile loans.

b. Loans fully collateralized by cash deposits at the same financial institution. c. Home mortgages.

d. Unpaid credit card balances not exceeding $15,000.

Generally, loans between a CPA firm or its members and an audit client are prohibited because it is a financial relationship. Which of the following, made under normal lending procedures, is not an exception to this rule? a. Immaterial loans. b. Home mortgages. c. Material loans. d. Secured loans.

Rule 101 indicates that materiality is a consideration for: a. evaluating direct investments made by the CPA. b. evaluating indirect ownership investments. c. either a or b. d. neither a nor b.

In the first year of SOX implementation, many auditors did not advise their clients regarding accounting or internal control related matters. Which of the following statements best describes why this occurred?

a. The auditors were prohibited from providing such guidance to their clients by SEC regulations.

b. Corporate executives were concerned that if auditors provided advice the auditors would lose their independence.

c. Both a and b are correct answers. d. Neither a nor b is correct.

It is not a violation of the AICPA’s Code of Professional Conduct for a CPA to:

a. charge fees as an expert witness determined by the amount awarded to the plaintiff, even

though the CPA also performs a compilation for client use .

b. base consulting fees on a percentage of a bond issue, even though the CPA performs a

review of the client’s financial statements.

c. base fees for a tax service on the amount of the refund that the client will receive.

d. base consulting fees on a percentage of a bond issue, even though CPA performs an audit

of the client’s financial statements.

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71.

challenging d

72.

challenging c

73.

challenging a

74.

challenging c

75.

challenging a

76. (SOX) challenging d

Which of the following is not defined as an act discreditable in either the Rules or the Interpretations of the AICPA’s Code of Professional Conduct?

a. The CPA firm has issued the standard unqualified audit report after auditing a

governmental agency, although GAAS was not followed because the government required procedures different from GAAS.

b. The CPA firm discriminates in its hiring practices based on the age of the applicant.

c. The CPA retains the client’s books and records to enforce past-due payment of the CPA’s

bill, even after the client has demanded they be returned.

d. The CPA firm’s partner-in-charge was arrested recently on his way home from the firm’s

holiday party. He was a passenger in a car driven by his wife and she was charged with “driving while intoxicated.”

There are a number of offenses for which a CPA may be expelled from membership in the AICPA. Which of the following is not one of these offenses?

a. The willful failure to file any income tax return that the CPA, as an individual taxpayer, is

required by law to file.

b. The willful filing of a fraudulent income tax return on a client’s behalf. c. Conviction of a crime punishable by imprisonment of 6 months.

d. Conviction of a crime punishable by imprisonment for more than 12 months.

Which of the following statements regarding professional and regular corporations is not true? a. Shareholders in both professional corporations and regular corporations are individually

liable in litigation against the CPA firm.

b. The shareholders, officers, and employees must comply with all Code of Professional

Conduct requirements.

c. Stock in a public accounting corporation must be held by only those CPAs who are

qualified to practice.

d. The firm name must meet the same requirements as those for a single proprietorship and

partnership.

In which of the following instances would the independence of the CPA not be considered to be impaired? The CPA has been retained as the auditor of a:

a. charitable organization in which an employee of the CPA serves as treasurer.

b. municipality in which the CPA owns $250,000 of the $2,500,000 indebtedness of the

municipality.

c. cooperative apartment house in which the CPA owns an apartment and is not part of the

management.

d. company in which the CPA’s investment club owns a one-tenth interest.

Rule 201 - General Standards requires members to comply with certain standards and interpretations. Which of the following is not a standard specifically addressed in Rule 201? a. Professional integrity. b. Due professional care. c. Planning and supervision. d. Sufficient relevant data.

Which of the following statements is correct?

a. Non-audit services that are not prohibited by Sarbanes-Oxley or the SEC rules must be

approved by management of the client.

b. Non-audit services that are not prohibited by Sarbanes-Oxley or the SEC rules must be

approved by staff of the PCAOB.

c. Non-audit services that are not prohibited by Sarbanes-Oxley or the SEC rules must be

approved by staff of the PCAOB and the SEC.

d. Non-audit services that are not prohibited by Sarbanes-Oxley or the SEC rules must be

approved by the company’s audit committee.

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Essay Questions

77. easy

Explain why there is a special need for ethical conduct in the auditing profession.

Answer: Since users (e.g., the general public) of services provided by an auditor generally cannot

evaluate the quality of the auditor’s performance, it is critical to the auditing profession that the public have a high degree of confidence in the quality of the services provided by the auditor. Public confidence in the quality of professional services is enhanced when the profession encourages high standards of performance and ethical conduct by all its members. If users of auditing services were to lack confidence in the quality of those services, then the value of CPA firms’ audits would be diminished, as would the demand for audits.

Discuss the ways the accounting profession and society encourage CPAs to conduct themselves in a professional manner; i.e., the factors that influence the ethical conduct of audit practitioners.

Answer: There are many factors that encourage CPAs to conduct themselves at a high level,

including:

? GAAS and interpretations. ? Code of Professional Conduct. ? Legal liability. ? Quality control. ? Peer review.

? Continuing professional education requirements. ? CPA examination. ? SEC.

? Division of CPA firms.

? Public Company Accounting Oversight Board.

Identify and describe each of the four parts to the AICPA’s Code of Professional Conduct. Also discuss which parts are officially enforceable and which are not.

Answer: The four parts to the Code are:

? Principles. These establish ideal standards of ethical conduct stated in philosophical

terms. They are not officially enforceable.

? Rules of conduct. These are the minimum standards of ethical conduct stated as

specific rules. They are officially enforceable.

? Interpretations. Interpretations of rules are intended to clarify the rules of conduct.

They are not officially enforceable, but a practitioner must justify any departure.

? Ethical rulings. These are answers to specific questions submitted to the AICPA by

practitioners. They are not enforceable, but a practitioner must justify any departure.

78. medium

79. medium

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