For each of the following scenarios, determine if the CPAs
actions as described are in violation of the AICPA Code of Professional
Conduct.
Yes, the CPAs actions are in violation
No, the CPAs actions are not in violation
QUESTION 1
1.
A CPA has installed a fairly
large neon sign over the entrance to her building which reads, Jane Jones,
Certified Public Accountant, Audits, Taxes, Bookkeeping.
Yes
No

QUESTION 2
1.
A CPA places an ad in the local
newspaper announcing the admission of new partners to the firm, the relocation
of the office, the new phone number, office hours, and hourly rates
charged. The ad also mentions that certain of their partners and staff
are fluent in Spanish.
Yes
No
QUESTION 3
1.
A state wherein a CPA practices
has just passed a law mandating that all municipalities over 10,000 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
1.
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.
Yes
No
QUESTION 5
1.
A CPA audits the books of a
corporation in which his wife is a stockholder. The CPA has no financial
interest in the client.
Yes
No
QUESTION 6
1.
A CPA audited the financial
statements of a client for the year ended December 31, 2011. In November
2011 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
1.
A regulatory agency asked a CPA
to supply confidential client information in connection with an investigation
of the client. The client refused the give the CPA permission to comply
with the agencys request, but the CPA supplied the information anyway.
Yes
No

QUESTION 8
1.
A CPA has been 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.
Yes
No
QUESTION 9
1.
A CPA audited a companys
financial statements for the year ended June 30, 2012, and was issued stock by
the client in payment of the audit fee. Because the stock was immaterial
to the CPAs personal net worth, she kept the stock in her investment
portfolio.
Yes
No
QUESTION 10
1.
On January 5 2012, a client
engages a CPA to perform its audit for the 12 months ended December 31,
2011. In March 2011, the CPA prepared the companys 2010 corporate tax
return for which he has still not been paid. 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 2010 tax engagement
prior to the issuance of the 2011 audit report.
Yes
No
QUESTION 11
1.
The trustee of a bankruptcy
estate engaged a CPA to audit a client in bankruptcy. 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
1.
A CPA performs payroll
preparation services for an audit client, which include preparing and signing
payroll checks. The CPA is also responsible for mailing the checks to
employees or authorizing a transfer of funds from a client bank account to
employees bank accounts.
Yes
No
QUESTION 13
1.
A CPA has a loan from a client
financial institution that the CPA believes meets the requirements for a
grandfathered loan under Ethics Interpretation 101-5. Periodically, the
bank requires the CPA to submit personal financial statements and other
information in order to reevaluate the CPAs creditworthiness to renew the
loan. Since the CPA believes the loan continues to be considered
grandfathered, she continues to audit the clients financial statements on an
ongoing basis.
Yes
No
QUESTION 14
1.
A CPAs dependent parent is a
5% limited partner in an audit client of the CPA. The CPA is a partner in
his accounting firm.
Yes
No
QUESTION 15
1.
A staff-level CPA participating
in a review engagement, has a dependent daughter who owns 10 shares of the
review clients stock.
Yes
No
QUESTION 16
1.
A CPA, a partner assigned to a
review engagement, has a non-dependent son who is employed by the client as a
machine operator.
Yes
No

True and false
QUESTION 1
1.
The
purpose of an audit is to express an opinion on whether the financial statements
are in accordance with GAAS.
True
False
QUESTION 2
1.
Assertions
relating to the financial statements are set forth by the auditor.
True
False
QUESTION 3
1.
An
audit should test every item in the financial records of the client.
True
False
QUESTION 4
1.
The
completeness assertion posits that all transactions and events that should have
been recorded were recorded.
True
False
QUESTION 5
1.
Audits
of issuers must follow the standards of the Public Company Accounting Oversight
Board.
True
False
For each of the following scenarios, determine if the CPAs
actions as described are in violation of the AICPA Code of Professional
Conduct.Yes, the CPAs actions are in violationNo, the CPAs actions are not in violationQUESTION 11.
A CPA has installed a fairly
large neon sign over the entrance to her building which reads, Jane Jones,
Certified Public Accountant, Audits, Taxes, Bookkeeping.Yes
NoQUESTION 21.
A CPA places an ad in the local
newspaper announcing the admission of new partners to the firm, the relocation
of the office, the new phone number, office hours, and hourly rates
charged. The ad also mentions that certain of their partners and staff
are fluent in Spanish.Yes
NoQUESTION 31.
A state wherein a CPA practices
has just passed a law mandating that all municipalities over 10,000 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
NoQUESTION 41.
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.Yes
NoQUESTION 51.
A CPA audits the books of a
corporation in which his wife is a stockholder. The CPA has no financial
interest in the client.Yes
NoQUESTION 61.
A CPA audited the financial
statements of a client for the year ended December 31, 2011. In November
2011 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
NoQUESTION 71.
A regulatory agency asked a CPA
to supply confidential client information in connection with an investigation
of the client. The client refused the give the CPA permission to comply
with the agencys request, but the CPA supplied the information anyway.Yes
NoQUESTION 81.
A CPA has been 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.Yes
NoQUESTION 91.
A CPA audited a companys
financial statements for the year ended June 30, 2012, and was issued stock by
the client in payment of the audit fee. Because the stock was immaterial
to the CPAs personal net worth, she kept the stock in her investment
portfolio.Yes
NoQUESTION 101.
On January 5 2012, a client
engages a CPA to perform its audit for the 12 months ended December 31,
2011. In March 2011, the CPA prepared the companys 2010 corporate tax
return for which he has still not been paid. 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 2010 tax engagement
prior to the issuance of the 2011 audit report.Yes
NoQUESTION 111.
The trustee of a bankruptcy
estate engaged a CPA to audit a client in bankruptcy. 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
NoQUESTION 121.
A CPA performs payroll
preparation services for an audit client, which include preparing and signing
payroll checks. The CPA is also responsible for mailing the checks to
employees or authorizing a transfer of funds from a client bank account to
employees bank accounts.Yes
NoQUESTION 131.
A CPA has a loan from a client
financial institution that the CPA believes meets the requirements for a
grandfathered loan under Ethics Interpretation 101-5. Periodically, the
bank requires the CPA to submit personal financial statements and other
information in order to reevaluate the CPAs creditworthiness to renew the
loan. Since the CPA believes the loan continues to be considered
grandfathered, she continues to audit the clients financial statements on an
ongoing basis.Yes
NoQUESTION 141.
A CPAs dependent parent is a
5% limited partner in an audit client of the CPA. The CPA is a partner in
his accounting firm.Yes
NoQUESTION 151.
A staff-level CPA participating
in a review engagement, has a dependent daughter who owns 10 shares of the
review clients stock.Yes
NoQUESTION 161.
A CPA, a partner assigned to a
review engagement, has a non-dependent son who is employed by the client as a
machine operator.Yes
NoTrue and false1.
The
purpose of an audit is to express an opinion on whether the financial statements
are in accordance with GAAS.TrueFalse1.
Assertions
relating to the financial statements are set forth by the auditor.TrueFalse1.
An
audit should test every item in the financial records of the client.TrueFalse1.
The
completeness assertion posits that all transactions and events that should have
been recorded were recorded.TrueFalse1.
Audits
of issuers must follow the standards of the Public Company Accounting Oversight
Board.TrueFalse