Question \u00a01\t\u00a0\t\u00a0 \u00a0 One of the main reasons people act unethically is that they choose to act selfishly.\t\u00a0 \u00a0 \u00a0 \u00a0 True\t\u00a0 \u00a0 \u00a0 \u00a0 False\t\u00a0 \u00a0\u00a0\t\u00a0\tQuestion 2\t\u00a0\t\u00a0 \u00a0 Which of the following best describes the reason why an independent auditor reports on financial statements?\t\u00a0\t\u00a0\t\u00a0 \u00a0 \u00a0 \u00a0 Poorly designed internal controls may be in existence.\t\u00a0 \u00a0 \u00a0 \u00a0 A misstatement of account balances may exist and is generally corrected as the result of the independent auditor’s work.\t\u00a0 \u00a0 \u00a0 \u00a0 Different interests may exist between the company preparing the statements and the persons using the statements.\t\u00a0 \u00a0 \u00a0 \u00a0 A misappropriation of assets may exist, and it is more likely to be detected by independent auditors.\t\u00a0 \u00a0\u00a0\t\u00a0\tQuestion 3\t\u00a0\t\u00a0 \u00a0 Because of the risk of material misstatement, an audit should be planned and performed with an attitude of\t\u00a0\t\u00a0\t\u00a0 \u00a0 \u00a0 \u00a0 independent integrity.\t\u00a0 \u00a0 \u00a0 \u00a0 professional skepticism.\t\u00a0 \u00a0 \u00a0 \u00a0 impartial conservatism.\t\u00a0 \u00a0 \u00a0 \u00a0 objective judgment.\t\u00a0\t\u00a0 \u00a0 Question 4\t\u00a0\t\u00a0 \u00a0 Recklessness in the case of an audit is present if the auditor knew an adequate audit was not done but still issued an opinion, even though there was no intent to deceive financial statement users. This description is the legal term for:\t\u00a0\t\u00a0\t\u00a0 \u00a0 fraud.\t\u00a0 \u00a0 constructive fraud.\t\u00a0 \u00a0 \u00a0 \u00a0 gross negligence.\t\u00a0 \u00a0 \u00a0 \u00a0 ordinary negligence.\t\u00a0\t\u00a0\t\u00a0 \u00a0 Question 5\t\u00a0\t\u00a0 \u00a0 In the performance of an audit, a CPA:\t\u00a0\t\u00a0 \u00a0 \u00a0 \u00a0 must exercise constructive professional care in the performance of their audit responsibilities.\t\u00a0 \u00a0 \u00a0 \u00a0 is legally liable for detecting an immaterial client fraud.\t\u00a0 \u00a0 \u00a0 \u00a0 must strictly follow GAAP for privately held clients.\t\u00a0 \u00a0 \u00a0 \u00a0 must exercise due professional care in the performance of their audit responsibilities.\t\u00a0 \u00a0 Question 6\t\u00a0\t\u00a0 \u00a0 The major reason an independent auditor gathers audit evidence is to\t\u00a0\t\u00a0\t\u00a0 \u00a0 \u00a0 \u00a0 assess control risk.\t\u00a0 \u00a0 \u00a0 \u00a0 form an opinion on the financial statements.\t\u00a0 \u00a0 \u00a0 \u00a0 detect fraud.\t\u00a0 \u00a0 \u00a0 \u00a0 evaluate management.\t\u00a0\t\u00a0\t\u00a0 \u00a0 Question 7\t\u00a0\t\u00a0 \u00a0 Ethics are:\t\u00a0 \u00a0 \u00a0 \u00a0 a set of moral principles or values.\t\u00a0 \u00a0 \u00a0 \u00a0 not formed by life experiences.\t\u00a0 \u00a0 \u00a0 \u00a0 always incorporated in laws.\t\u00a0 \u00a0 \u00a0 \u00a0 needed in the professions, but is not needed for society in general.\t\u00a0\t\u00a0\t\u00a0 \u00a0 Question 8\t\u00a0\t\u00a0 \u00a0 If the auditor believes that the financial statements are not fairly stated or is unable to reach a conclusion because of insufficient evidence, the auditor:\t\u00a0\t\u00a0\t\u00a0 \u00a0 should notify regulators of the circumstances.\t\u00a0 \u00a0 \u00a0 \u00a0 should withdraw from the engagement.\t\u00a0 \u00a0 \u00a0 \u00a0 should request an increase in audit fees so that more resources can be used to conduct the audit.\t\u00a0 \u00a0 \u00a0 \u00a0 has the responsibility of notifying financial statement users through the auditor’s report.\t\u00a0 \u00a0 \u00a0 \u00a0 should notify regulators of the circumstances.\t\u00a0\t\u00a0\t\u00a0 \u00a0 Question 9\t\u00a0\t\u00a0 \u00a0 The objective of an audit of the financial statements is an expression of an opinion on:\t\u00a0\t\u00a0 \u00a0 the fairness of the financial statements in all material respects.\t\u00a0 \u00a0 \u00a0 \u00a0 the accuracy of the financial statements.\t\u00a0 \u00a0 \u00a0 \u00a0 the accuracy of the annual report.\t\u00a0 \u00a0 \u00a0 \u00a0 the fairness of the financial statements in all material respects.\t\u00a0 \u00a0 \u00a0 \u00a0 the accuracy of the balance sheet and income statement.\t\u00a0\t\u00a0 \u00a0 Question 10\t\u00a0\t\u00a0 \u00a0 ________ means that a person acts according to conscience, regardless of the situation.\t\u00a0\t\u00a0\t\u00a0 \u00a0 \u00a0 \u00a0 Respect\t\u00a0 \u00a0 \u00a0 \u00a0 Fairness\t\u00a0 \u00a0 \u00a0 \u00a0 Integrity\t\u00a0 \u00a0 \u00a0 \u00a0 Caring\t\u00a0\t\u00a0 \u00a0 Question 11\t\u00a0\t\u00a0 \u00a0 How does the prudent person concept affect the liability of the auditor?\t\u00a0\t\u00a0\t\u00a0 \u00a0 \u00a0 \u00a0 The prudent person concept states that a person is responsible for conducting a job in good faith, integrity, and with qualifications and attention that prevents errors. Therefore, the auditor is expected to conduct an audit using such due care that they can guarantee the accuracy of the financial statements.\t\u00a0\t\u00a0 \u00a0 \u00a0 \u00a0 The prudent person concept states that third parties can confidently rely on the independence of the auditors in their work. However there is liability to the auditors if they hide their lack of independence or they mislead the third parties.\t\u00a0\t\u00a0 \u00a0 \u00a0 \u00a0 The prudent person concept states that a person is responsible for conducting a job in good faith and with integrity, but is not infallible. Therefore, the auditor is expected to conduct an audit using due care, but does not claim to be a guarantor or insurer of financial statements.\t\u00a0\t\u00a0 \u00a0 \u00a0 \u00a0 The prudent person concept states that auditors are responsible for the accuracy of the financial statements that are prepared, but only based on his or her good faith. Therefore, the auditor must keep up with accounting standards to ensure compliance.\t\u00a0\t\u00a0 \u00a0 Question 12\t\u00a0\t\u00a0 \u00a0 What is an ethical dilemma?\t\u00a0\t\u00a0\t\u00a0 \u00a0 \u00a0 \u00a0 An ethical dilemma is a situation that a person faces in which a decision must be made about the appropriate behavior.\t\u00a0\t\u00a0 \u00a0 \u00a0 \u00a0 An ethical dilemma is a synonym for a legal dilemma.\t\u00a0 \u00a0 \u00a0 \u00a0 None of the above\t\u00a0 \u00a0 \u00a0 \u00a0 An ethical dilemma in accounting occurs when an error in the financial statement has been discovered.\t\u00a0\t\u00a0\t\u00a0 \u00a0 Question 13\t\u00a0\t\u00a0 \u00a0 What are the six core ethical values described by the Josephson Institute?\t\u00a0\t\u00a0\t\u00a0 \u00a0 \u00a0 \u00a0 (1) Compassion, (2) Respect, (3) Loyalty, (4) Fairness, (5) Unbiased, and (6) Trustworthiness\t\u00a0 \u00a0 \u00a0 \u00a0 (1) Trustworthiness, (2) Respect, (3) Responsibility, (4) Fairness, (5) Caring, and (6) Citizenship\t\u00a0 \u00a0 \u00a0 \u00a0 (1) Caring, (2) Compassion, (3) Friendliness, (4) Respect, (5) Trustworthiness, and (6) Morality\t\u00a0 \u00a0 \u00a0 \u00a0 (1) Respect, (2) Loyalty, (3) Fairness, (4) Unbiased, (5) Compassion, and (6) Caring\t\u00a0\t\u00a0 \u00a0 Question 14\t\u00a0\t\u00a0 \u00a0 Distinguish between “fraud” and “constructive fraud.”\t\u00a0\t\u00a0\t\u00a0 \u00a0 The difference between fraud and constructive fraud is that fraud can occur when there is a misstatement due to recklessness of the auditor whereas in constructive fraud the intent to deceive will cause extensive harm damaging the company.\t\u00a0\t\u00a0\t\u00a0 \u00a0 \u00a0 \u00a0 The difference between fraud and constructive fraud is that in fraud the wrongdoer intends to deceive another party whereas in constructive fraud there is a lack of intent to deceive or defraud\t\u00a0\t\u00a0 \u00a0 \u00a0 \u00a0 The difference between fraud and constructive fraud is that fraud can occur when there is a misstatement due to recklessness of the auditor whereas in constructive fraud the intent to deceive will cause extensive harm damaging the company.\t\u00a0 \u00a0 \u00a0 \u00a0 The difference between fraud and constructive fraud is that in fraud there is no intent to deceive or do harm; however, in constructive fraud a misstatement is made where there is knowledge of its falsity.\t\u00a0\t\u00a0 \u00a0 \u00a0 \u00a0 The difference between fraud and constructive fraud is that fraud is the absence of reasonable care that can be expected of a person in a set of circumstances; however constructive fraud is a lack of even the slightest care that can be expected of a person.\t\u00a0 \u00a0 Question 15\t\u00a0\t\u00a0 \u00a0 Auditors accumulate evidence to:\t\u00a0\t\u00a0 \u00a0 reach a conclusion about the fairness of the financial statements.\t\u00a0 \u00a0 \u00a0 \u00a0 satisfy the requirements of the Securities Acts of 1933 and 1934.\t\u00a0 \u00a0 \u00a0 \u00a0 determine if the financial statements are correct.\t\u00a0 \u00a0 \u00a0 \u00a0 defend themselves in the event of a lawsuit.\t\u00a0 \u00a0 \u00a0 \u00a0 reach a conclusion about the fairness of the financial statements.\t\u00a0\t\u00a0 \u00a0 Question 16\t\u00a0\t\u00a0 \u00a0 Which of the following best describes the reason why an independent auditor reports on financial statements?\t\u00a0\t\u00a0\t\u00a0 \u00a0 Poorly designed internal controls may be in existence. \u00a0 \u00a0 \u00a0\u00a0\t\u00a0\t\u00a0\t\u00a0 \u00a0 \u00a0 \u00a0 Different interests may exist between the company preparing the statements and the persons using the statements.\t\u00a0 \u00a0 \u00a0 \u00a0 A misstatement of account balances may exist and is generally corrected as the result of the independent auditor’s work.\t\u00a0 \u00a0 \u00a0 \u00a0 A misappropriation of assets may exist, and it is more likely to be detected by independent auditors.\t\u00a0 \u00a0\u00a0\tQuestion 17\t\u00a0\t\u00a0 \u00a0 If an auditor fails to fulfill a certain requirement in the contract, they may be guilty of:\t\u00a0\t\u00a0 \u00a0 \u00a0 \u00a0 constructive fraud.\t\u00a0 \u00a0 \u00a0 \u00a0 breach of contract.\t\u00a0 \u00a0 \u00a0 \u00a0 criminal neglect.\t\u00a0 \u00a0 \u00a0 \u00a0 contract fraud.<\/p>\n","protected":false},"excerpt":{"rendered":"
Question \u00a01 \u00a0 \u00a0 \u00a0 One of the main reasons people act unethically is that they choose to act selfishly. \u00a0 \u00a0 \u00a0 \u00a0 True \u00a0 \u00a0 \u00a0 \u00a0 False \u00a0 \u00a0\u00a0 \u00a0 Question 2 \u00a0 \u00a0 \u00a0 Which of Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-199554","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/199554","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=199554"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/199554\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=199554"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=199554"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=199554"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}