What is arguably the most critical issue in a municipality's code of ethics? Free of conflicts of interest that would cause the firm to be biased either for or against the attest client.
The ad also mentions that certain of their partners and staff are fluent in Spanish. Yes No Question 3 A state wherein a CPA practices has just passed a law mandating that all municipalities over 10, population have annual audits. The CPA and his partners telephone all the council presidents and city managers of cities of that size soliciting their audit work.
Yes No Question 4 A CPA, a partner in a one-office accounting firm, has a brother who is a member of the board of directors of an audit client. The partner lives about ten miles from her brother.
She and her husband do not have any joint investments with her brother. Social contacts with her brother are infrequent. The CPA has no financial interest in the client. In November a partner in the same firm assisted the client in obtaining financing under an arrangement in which the fee for such service would not be paid unless the financing was obtained.
Yes No Question 7 A regulatory agency asked a CPA to supply confidential client information in connection with an investigation of the client. Yes No Question 8 A CPA has Aicpa spousal equivalent served with a validly issued and enforceable subpoena to turn over certain client records that contain confidential client information.
The client refused the give the CPA permission to comply with the subpoena, but the CPA turned over the records anyway.
The CPA decides to accept the audit engagement and commence with the fieldwork, but has made an arrangement with the client to be paid in full for the tax engagement prior to the issuance of the audit report.
The CPA performed the audit for this same client the prior year, and has not been paid. The CPA accepts the audit engagement and commences with fieldwork.
No arrangements have yet been made for payment for either audit engagement. Yes No Question 12 A CPA performs payroll preparation services for an audit client, which include preparing and signing payroll checks.
The CPA is a partner in his accounting firm. Yes No Question 16 A CPA, a partner assigned to a review engagement, has a non-dependent son who is employed by the client as a machine operator. A provision of investment advisory services, with the fee based on a percentage of the investment portfolio.
A compilation of the financial statements of client seeking a loan, with the fee contingent upon the amount the client is able to borrow. The report does not disclose lack of independence. An audit of the financial statements of a company that intends to issue securities for sale to the public, with the fee contingent upon the proceeds from the sale of the securities.
Financial Accounting Standards Board. Governmental Accounting Standards Board. A consulting service engagement to provide computer advice to a client. An engagement to report on compliance with statutory requirements. An income tax engagement to prepare federal and state tax returns.
Provides a service to the audit client for a contingent fee. Provides tax services to a person in a financial reporting oversight role at the audit client.
Receives a commission from the audit client. Has an audit client that employs a former firm professional. Which of the following is not a provision of the Act?
The Act provides criminal penalties for fraud. Auditors may not provide specific non-audit services for their audit clients.
Audit firms must be rotated on a periodic basis. Executives must certify the appropriateness of the financial statements. The auditor must adopt a critical attitude during the audit. The auditor must be without bias with respect to the client under audit.
A CPA fails to follow standards and procedures established by governmental agencies in audits of grants by those agencies. A CPA has a bank collect notes received from a client in payment of fees. A CPA-defendant has lost a final appeal of an adverse verdict in a racial discrimination suit in federal court.An intentionally defective grantor trust (IDGT) is a complete transfer to a trust for transfer tax purposes but an incomplete, “defective” transfer for income tax purposes.
Spousal Equivalent / Domestic Partner Coverage Several states have enacted laws requiring equal coverage for spouses and spousal equivalents. A spouse or spousal equivalent is a partner of the primary enrollee as defined by the laws of the. The immediate family of a covered member of an audit engagement is defined as the spouse or spousal equivalent and any dependent.
These immediate family members of a covered member can have no direct financial interest in the audit client. INDEPENDENCE RULES MODERNIZATION PROJECT. AICPA PROFESSIONAL ETHICS EXECUTIVE COMMITTEE. December NOTICE TO READERS. The Professional Ethics Executive Committee has developed this white paper to explain its November rules release, which revised interpretation of Rule , Independence, and related definitions (ET section 92) of the AICPA .
A. Audit documentation only supplied by the client.
B. Audit documentation is a copy of last year’s workpapers. C. Audit documentation obtained by the auditor with reviews by supervisory personnel D. Audit documentation with misapplication of GAAP.
Answer C Which of the following relationships do not impair CPA-auditor independence?94%(). services to the client, (3) spouses, spousal equivalents, and dependents of any person in (1) or (2), and (4) any group of persons in (1), (2) or (3). If such person(s) owns 5 percent or more of or controls an audit client, (as evidenced by filed Schedule 13D or 13G), the CPA firm is not independent.