This Tutorial contains More than 150 Question Test Bank (we have listed some of the Questions below) Week 5 Quiz Question 1 � An accountant’s compilation report on a financial forecast should include a statement that the Question 2 � � � When a CPA examines a client’s projected financial statements, the CPA’s report should Question 3 At a confidential meeting, an audit client informed a CPA about the client’s illegal insider-trading actions. A year later, the CPA was subpoenaed to appear in federal court to testify in a criminal trial against the client. The CPA was asked to testify to the meeting between the CPA and the client. After receiving immunity, the CPA should do which of the following? Question 4 � (NOTE: This is a CPAexcel simulated Exam Question, not AICPA licensed Material) XYZ Corporation is having financial difficulties. Its CFO has ordered subordinates to pump up revenues artificially and hide that fact from the external auditor. If an internal auditor of XYZ intentionally misleads XYZ’s outsider auditor from the ABC Accounting firm, the internal auditor has: Question 5 (AICPA.080962REG-1B) � � (NOTE: This is a CPAexcel simulated Exam Question, not AICPA licensed Material) Duncan, an accounting firm, is auditing Alchemy Inc. Regarding commissions and referral fees, which of the following arrangements would be permissible? Question 6 � A CPA who is not in public practice is obligated to follow which of the following rules of conduct? Question 7 � � � Under the Statements on Standards for Consulting Services, which of the following statements best reflects a CPA’s responsibility when undertaking a consulting services engagement? The CPA must Question 8 � Under the Code of Professional Conduct of the AICPA, which of the following is required to be independent in fact and appearance when discharging professional responsibilities? Question 9 � Locke, CPA, was engaged to perform an audit for Vorst Co. During the audit, Locke discovered that Vorst’s inventory contained stolen goods. Vorst was indicted and Locke was validly subpoenaed to testify at the criminal trial. Vorst has claimed accountant-client privilege to prevent Locke from testifying. Locke may be compelled to testify Question 10 (NOTE: This is a CPAexcel simulated Exam Question, not AICPA licensed Material) Ron is a partner in the Houston office of KPMG. A partner in Ron’s office is the lead partner on the team that audits Midstream Pipeline, which operates intrastate oil and gas pipelines, but Ron is not on the engagement team. Which of the following scenarios represents an independence violation of the AICPA Code of Conduct? Question 11 (NOTE: This is a CPAexcel simulated Exam Question, not AICPA licensed Material) The CPA firm, where Joanna is currently a tax partner, is auditing Bubbles Corp. in Austin. Her mother, Teresa, has been working as a receptionist for Bubbles for the last 30 years. Her best friend since grade school, Maggie, is currently serving as CFO at Bubbles. Joanna knows that her brother, Jonathan, sank most of his savings into a purchase of 6% of Bubbles outstanding stock, which he currently owns. Does Joanna have an independence issue? Question 12 An accountant may accept an engagement to apply agreed-upon procedures to prospective financial statements provided that Question 13 (NOTE: This is a CPAexcel simulated Exam Question, not AICPA licensed Material) In order to preserve independence, the PCAOB requires: Question 14 According to the standards of the profession, which of the following activities would most likely not impair a CPA’s independence? Question 15 According to the standards of the profession, which of the following circumstances will prevent a CPA performing audit engagements from being independent? Question 16 Which of the following is a term for an attest engagement in which a CPA assesses a client’s commercial Internet site for predefined criteria that are designed to measure transaction integrity, information protection, and disclosure of business practices? Question 17 A CPA in public practice is required to comply with the provisions of the Statements on Standards for Attestation Engagements (SSAE) when Question 18 An accountant’s report expressing an opinion on a nonissuer’s internal control over financial reporting should state that Question 19 In a state jurisdiction having an accountant-client privilege statute, to whom may a CPA turn over work papers without a client’s permission? Question 20 Mell Corp. engaged Davis & Co., CPAs. to audit Mell’s financial statements. Mell’s management informed Davis it suspected that the accounts receivable were materially overstated. Although the financial statements did include a materially overstated accounts receivable balance, Davis issued an unqualified opinion.Mell relied on the financial statements in deciding to obtain a loan from County Bank to expand its operations. County relied on the financial statements in making the loan to Mell. As a result of the overstated accounts receivable balance, Mell has defaulted on the loan and has incurred a substantial loss. If County sues Davis for fraud, must Davis furnish County with the audit working papers?
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