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61.     Interpretations of the AICPA Code of Professional Conduct are dominated by the concept of
challenging     a.     independence.
     b.     compliance with standards.
     c.     accounting.
     d.     acts discreditable to the profession.
     

     
62.
challenging     An audit committee, made up of members of 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.
     
63.
challenging
     When a CPA firm is requested to provide a written or oral opinion on the application of accounting principles or the type of audit opinion that would be issued for a specific or hypothetical transaction relating to an audit client of another CPA firm, primary among the requirements set forth is that
     a.     client is entitled to confidentiality, so the consulting CPA firm is forbidden from communicating with the CPA firm which does the audit.
     b.     the consulted CPA firm should communicate with the entity’s existing auditors to ascertain all the available facts relevant to forming a professional judgment on the matters the firm has been requested to report on.
     c.     client is entitled to confidentiality, so the CPA firm which does the audit should refuse to share any information with the consulting CPA firm under any circumstances.
     d.     client is not entitled to confidentiality under these circumstances, so the existing auditors should share all information with the consulting CPA firm.
     
64.
challenging     The Code of Professional Conduct is established by the membership of the AICPA, and the Interpretations of the Rules of Conduct are prepared by
     a.     the Financial Accounting Standards Board.
     b.     the Securities and Exchange Commission.
     c.     the CPA licensing agencies within each state.
     d.     the Division of Professional Ethics of the AICPA.
     
65.
challenging     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.
     c.     Home mortgages.
     d.     Unpaid credit card balances not exceeding $10,000.
     
66.
challenging
     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.     Fully-collateralized secured loans.
     

67.
challenging     The confidential relationship will be violated if, without client’s permission, the CPA provides working papers about client to
     a.     a court of law which subpoenas them.
     b.     another CPA firm as part of an AICPA peer review program.
     c.     another CPA firm which has just purchased the CPA’s entire practice.
     d.     an investigative or disciplinary body of the AICPA which is conducting a review of the CPA’s practice.
     
68.
challenging     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.” He was also arrested and charged with “lewd and indecent gestures towards an officer of the law” and rowdy behavior.
     
69.     It is not a violation of the AICPA’s Code of Professional Conduct for a CPA to
challenging
     a.     charge fees as an expert witness determined by the amount awarded to the plaintiff, even though CPA performs a compilation for client use also.
     b.     base consulting fees on a percentage of a bond issue, even though CPA performs a review for client also.
     c.     base his or her fee for a tax service on the amount of the refund that client will receive.
     d.     base consulting fees on a percentage of a bond issue, even though CPA performs an audit for client also.
     
70.
challenging
     There are a number of offenses for which a CPA may be expelled from membership in the AICPA without a hearing for judgment of conviction. 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 filing of a fraudulent income tax return on the CPA’s or client’s behalf.
     c.     Conviction of a crime punishable by imprisonment for more than 18 months.
     d.     Conviction of a crime punishable by fine only.
     
71.     Which of the following statements regarding professional and regular corporations is not true?
challenging
     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.
     

     
72.
challenging
     Rule 201 - General Standards requires members to comply with certain standards and interpretations designated by Council. Which of the following is not one of the standards specifically addressed in Rule 201?
     a.     Professional integrity.
     b.     Due professional care.
     c.     Planning and supervision.
     d.     Sufficient relevant data.
     
73.
challenging
     The AICPA Code of Professional Conduct requires compliance with accounting principles promulgated by the body designated by AICPA Council to establish such principles. The pronouncements comprehended by the code include all of the following except
     a.     opinions issued by the Accounting Principles Board.
     b.     interpretations issued by the Financial Accounting Standards Board.
     c.     AICPA Accounting Research Studies.
     d.     AICPA Accounting Research Bulletins.
     
74. (SOX)
challenging
     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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