PROF ETHICS

1.Which of the following would most likely be a violation of the profession's ethical standards of
independence?
a. An audit client owes a CPA fees for two consecutive engagements.
b. A CPA received a fee for referring a client to an attorney. The fee was disclosed to the client.
c. A CPA divulged information about a client under oath in a civil trial.
d. A CPA is in partnership with a certified financial planner.
2.The SEC's Auditor Independence Rules include all of the following requirements except:
a. pre-approvement by audit committee of public audit clients for all audit and non-audit services.
b. rotation of lead and review partners each year.
c. prohibition of employment by a public audit client.
d. prohibition of audit partner compensation for work other than audit, review and attest services.
3. Which of the following advertising practices would not be considered false, deceptive, or misleading?
a. Listing a CPA's educational and professional background.
b. Stating that a CPA can influence tax laws.
c. Claiming to be able to save a taxpayer 15% on his or her tax bill.
d. Guaranteeing a favorable outcome before beginning a consulting engagement.
4. Which of the following ethics rule applies only to CPAs in public accounting?
a. confidentiality
b. independence
c. discreditable acts
d. compliance with standards
5. The AICPA Code of Professional Conduct applies to:
a. only audit engagements.
b. only tax engagements.
c. all services offered by AICPA members.
d. only attest engagements.
6. Which of the following circumstances will impair a CPA's independence?
a. Employment of the CPA's spouse as an audit client's assistant controller.
b. Immaterial litigation with a tax client disputing the amount of fees billed for tax services.
c. Maintaining an insured checking account with a credit union that is an audit client.
d. Membership in a country club for which the CPA performs review services.
7. Rule 302 regarding contingent fees prohibits AICPA members in public practice from receiving contingent
fees in all but which situation?
a. The member or firm performs audits or reviews for the client.
b. The member or firm performs compilations for the client that a third party might rely on.
c. The member or firm performs only consulting services for the client.
d. The member or firm prepares original or amended tax returns for a refund for the client.
8. Rule 301, Confidential Client Information, is violated when a CPA in public practice:
a. performs consulting services for two competing business and uses knowledge gained in one engagement
to plan the other engagement
b. provides advice to tax clients based on problems encountered on tax engagements with other clients.
c. uses a computer service organization to process tax return data.

d. publishes an advertisement that makes specific references to problems solved for a consulting client by d.
name without the client's consent.
9.The Sarbanes-Oxley Act prohibits a registered public accounting firm from providing all of the following
services for public audit clients except:
a. actuarial services.
b. internal audit outsourced services.
c. tax services.
d. bookkeeping or other services related to the accounting records.
10.Which of the following acts by a CPA is generally prohibited?
a. Accepting a commission for recommending a product to an audit client.
b. Accepting clients referred by other professionals.
c. Advertising in a financial management newsletter.
d. Reselling a product to a client at a profit.
T/F
1.The Principles of the AICPA Code of Professional Conduct are not enforceable on AICPA members.
True
False
2.Direct ownership by a CPA's minor child in an audit client's securities would not impair independence.
True
False
3.A CPA may permit an audit client to assist in pricing and evaluating obsolescence of an inventory of complex
electronic equipment if the client possesses specialized technical knowledge of electronics that the CPA lacks.
True
False
4.A CPA would be in violation of the profession's ethical standards if (s)he retained client records to force
payment of professional fees.
True
False
5. Under Rule 301, a successor auditor is not required to communicate with the predecessor auditor.
True
False