Test Bank for Auditing An International Approach 7 edition

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Test Bank for Auditing An International Approach 7 edition

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WITH ANSWERS

 

Test Bank for Auditing An International Approach 7 edition

 

c3

Student: ___________________________________________________________________________

1. Which of the following philosophical principles in ethics places emphasis on the importance of following rules rather than on weighing the consequences of actions?

A. Kantian principle.

 

B. Utilitarian principle.

 

C. Consequentialism principle.

 

D. Moral principle.

 

2. Which of the following philosophical principles of ethics places emphasis on the consequences of action, rather than on following the rules?

A. Imperative principle.

 

B. Utilitarianism principle.

 

C. Generalization principle.

 

D. Moral principle.

 

3. What is a key characteristic of critical thinking?

A. It is a means of eliminating alternatives to arrive at one right answer.

 

B. It requires making the right assumptions to support an argument.

 

C. It requires a questioning mind.

 

D. It is a means of picking out things wrong with another persons argument.

 

4. The goal of the critical-thinking framework reflects ________.

A. independence

 

B. ideal audit virtues

 

C. skepticism

 

D. ethics

 

5. What is the meaning of the rule of professional conduct that requires an auditor to be objective?

A. The auditor may have a material, indirect financial interest in a clients business as long as it does not affect his or her judgment.

 

B. The auditor has an obligation to CPA Canada to not use his or her training for personal advantage.

 

C. The auditor has an obligation to serve the needs of the audit client.

 

D. The auditor must have an attitude of professional skepticism toward an auditees management.

 

6. The CPA Ontario Rules of Professional Conduct contain both general ethical principles that are idealistic in character and also a ________.

A. list of violations that would cause the automatic suspension of a members license

 

B. set of specific, mandatory rules describing minimum levels of conduct required of members

 

C. description of the procedures to be followed by a member who must respond to an inquiry from the disciplinary committee

 

D. list of specific acts discreditable to the profession

 

7. Which of the following items is the most important principle in the fundamental statements of accepted conduct?

A. Maintain the reputation of the profession.

 

B. Act with due care.

 

C. Maintain independence.

 

D. Act with professional courtesy.

 

8. A complaint has been made against a member for an audit failure. If this complaint is found to have merit, under which CPA Ontario Rule of Professional Conduct is the member likely to be charged?

A. 202 Integrity and due care.

 

B. 204 Independence.

 

C. 210 Conflict of interest.

 

D. 215 Contingent fees.

 

9. A succinct, but comprehensive definition of independence is that an auditor ________.

A. must be independent in fact and in appearance in order to maintain credibility

 

B. must not have a direct financial interest in a client

 

C. must have a license to practice as a public accountant

 

D. must not take on as an audit client a company owned by a member of his or her immediate family

 

10. The familiarity threat refers to ________.

A. becoming too sympathetic to a clients interests

 

B. providing assurance on ones own work

 

C. promoting a clients position or opinion

 

D. benefiting from a financial interest in a client

 

11. In the course of performing an audit, an auditor begins dating the CFO of the auditee. What kind of threat to independence might arise?

A. Self-review threat.

 

B. Self-interest threat.

 

C. Familiarity threat.

 

D. Intimidation threat.

 

12. A clients management claims that they have to restrict an auditors access to a research laboratory to protect the safety of the auditor. This could be an example of a lack of ________.

A. programming independence

 

B. investigative independence

 

C. control independence

 

D. reporting independence

 

13. According to the professions rules of conduct, an auditor would be considered independent in which of the following instances?

A. The auditor is the officially appointed stock transfer agent of a client.

 

B. The auditor has a personal chequing account in a branch of a client bank.

 

C. The client has not paid its audit fees for the past three years.

 

D. The client is the only tenant in a commercial building owned by the auditor.

 

14. How can competence and due care best be described?

A. Competence and due care both refer to the PA doing their best for their clients.

 

B. Competence refers to technical ability; due care refers to strictly following official pronouncements of accounting principles.

 

C. Competence is knowing what do; due care is doing it to the best of ones abilities.

 

D. Competence and due care both refer to ongoing technical training.

 

15. Regarding honorary positions in non-profit organizations, which of the following statements is FALSE?

A. Professional accountants can be honorary directors of charity hospitals, fund drives, symphony orchestra societies, and other non-profit organizations, as long as the position is purely honorary.

 

B. The professional accountant cannot be identified as an honorary director on letterheads and other literature.

 

C. The only form of participation is the use of the professional accountants name.

 

D. The professional accountant does not vote with the board or participate in management functions.

 

16. Which of the following statements regarding independence with respect to accounting and other services is FALSE?

A. If a professional accountant (PA) performs the bookkeeping and makes accounting decisions for a company and the management does not know enough about the financial statements to take primary responsibility for them, the PA cannot be considered independent for assurance services.

 

B. If a PA performs the bookkeeping and makes accounting decisions for a company and the management does not know enough about the financial statements to take primary responsibility for them, it might be perceived that the PA has both prepared the financial statements or other data and given an audit report or other assurance on his or her own work.

 

C. The PA cannot perform the bookkeeping for a company and also provide assurance services.

 

D. The PA can counsel the client management about the accounting principle choices, but in the final analysis the management must be able to say, These are our financial statements (or other data); we made the choices of accounting principles; we take primary responsibility for them.

 

17. In a study of law cases of accountants and auditors legal troubles, the greatest percentage arose from ________.

A. faulty implementation of audit procedures

 

B. client fraud

 

C. misinterpretation of accounting principles

 

D. fraud by the auditor

 

18. A private or civil wrong or injury is known as a ________.

A. breach

 

B. tort

 

C. misconduct

 

D. deceit

 

19. In common law actions, the burden of proof lies with the ________.

A. bailiff

 

B. defendant

 

C. plaintiff

 

D. jury

 

20. The failure to perform a duty with the requisite standard of care is known as _______.

A. lack of independence

 

B. negligence

 

C. lack of objectivity

 

D. misconduct

 

21. That a legal duty arises when there is a contractual agreement with the client is called ________.

A. standard of care

 

B. privity of contract

 

C. professionalism

 

D. independence

 

22. In addition to liabilities imposed by common law, auditors need also be concerned about what other type of liability?

A. Statutory law.

 

B. Tort law.

 

C. Professional liability.

 

D. Negligence.

 

23. If a party is found to be partially liable and thus only responsible for paying part of the damages relative to their share of the blame, this is known as ________.

A. due care

 

B. breaking even

 

C. proportionate liability

 

D. a tort

 

24. A letter where accountants sign that they have been notified that a particular recipient of the financial statements and audit report intends to rely upon them for particular purposes is known as a(n) ________.

A. management letter

 

B. compliance letter

 

C. reliance letter

 

D. engagement letter

 

25. Historically, auditors liability in Canada has been based on common law liability.

True    False

 

26. An ethical dilemma is one in which the choice of alternative actions affects the well-being of other persons.

True    False

 

27. Let your conscience be your guide is an ethical principle that fits all situations.

True    False

 

28. Consequentialism says that the right choice is the one that results in the greatest good for the greatest number of people.

True    False

 

29. Rules of professional conduct provide some direct solutions to specific, profession-related problems that may not be easily derived from general theories of ethics.

True    False

 

30. The Rules of Professional Conduct, state the set of very specific rules that flow from the general principles and are considered to be minimum standards.

True    False

 

31. The Rules of Professional Conduct for professional accountants apply to services performed by members in both public and private practice.

True    False

 

32. The fundamental principles of accepted conduct are only general guidelines; therefore, they are not as important as the specific rules.

True    False

 

33. If a professional accountant is convicted of a criminal offence or fraud, he or she is usually thrown out of the profession.

True    False

 

34. The codified Rules of Professional Conduct derives its authority from the CPA Canada Handbook.

True    False

 

35. If a public accountant (PA) performs the bookkeeping and makes accounting decisions for a company and the management does not know enough about the financial statements to take primary responsibility for them, the PA cannot be considered independent for assurance services.

True    False

 

36. Once public accountants (PAs) retire from a firm, they are no longer required to maintain independence from former clients.

True    False

 

37. Many users of audit reports expect auditors to detect fraud, theft, and illegal acts, and to report them publicly.

True    False

 

38. Legal liabilities of professional accountants arise only from lawsuits brought on the basis of the law of contracts.

True    False

 

39. The auditor has a duty of care to a company that hires the auditor and has a contract with him or her under privity of contract.

True    False

 

40. Auditors need not be concerned about statutory law liability.

True    False

 

41. Ethical theories can be divided into two types: monistic and pluralistic. Explain each.

 

 

 

 

42. What is professional skepticism?

 

 

 

 

43. It is sometimes said that there is a strong link between codes of conduct and GAAS. Explain.

 

 

 

 

44. Explain how CPA Ontario enforces the fundamental statements of accepted conduct and the Rules of Professional Conduct.

 

 

 

 

45. Summarize the professional competence and due care rules of the various codes of conduct.

 

 

 

 

46. Explain the difference among integrity, independence, and objectivity.

 

 

 

 

47. Identify five threats to the independence of a professional accountant.

 

 

 

 

48. Discuss how a public accountant (PA) can preserve independence while accepting an honorary position in non-profit organizations.

 

 

 

 

49. Discuss the rules relating to the provision of accounting and other services by a public accountant (PA).

 

 

 

 

50. When a professional accountant is sued, what is the lawsuit typically based on?

 

 

 

 

51. What is meant by privity?

 

 

 

 

52. What must a plaintiff prove regarding an action brought under common law against a PA?

 

 

 

 

53. What is joint and several liability?

 

 

 

 

 

 

c3 Key

1. Which of the following philosophical principles in ethics places emphasis on the importance of following rules rather than on weighing the consequences of actions?

A. Kantian principle.

 

B. Utilitarian principle.

 

C. Consequentialism principle.

 

D. Moral principle.

 

Accessibility: Keyboard Navigation
Blooms: Knowledge
Difficulty: Moderate
Learning Objective: 03-02 Explain the importance of the study of ethics in helping define auditor responsibilities.
Smieliauskas Chapter 03 #1
Topic: 03-06 Philosophical Principles in Ethics
 

 

2. Which of the following philosophical principles of ethics places emphasis on the consequences of action, rather than on following the rules?

A. Imperative principle.

 

B. Utilitarianism principle.

 

C. Generalization principle.

 

D. Moral principle.

 

Accessibility: Keyboard Navigation
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 03-02 Explain the importance of the study of ethics in helping define auditor responsibilities.
Smieliauskas Chapter 03 #2
Topic: 03-06 Philosophical Principles in Ethics
 

 

3. What is a key characteristic of critical thinking?

A. It is a means of eliminating alternatives to arrive at one right answer.

 

B. It requires making the right assumptions to support an argument.

 

C. It requires a questioning mind.

 

D. It is a means of picking out things wrong with another persons argument.

 

Accessibility: Keyboard Navigation
Blooms: Knowledge
Difficulty: Moderate
Learning Objective: 03-03 Outline the characteristics of critical thinking.
Smieliauskas Chapter 03 #3
Topic: 03-07 More on Critical Thinking
 

 

4. The goal of the critical-thinking framework reflects ________.

A. independence

 

B. ideal audit virtues

 

C. skepticism

 

D. ethics

 

Accessibility: Keyboard Navigation
Blooms: Knowledge
Difficulty: Moderate
Learning Objective: 03-03 Outline the characteristics of critical thinking.
Smieliauskas Chapter 03 #4
Topic: 03-07 More on Critical Thinking
 

 

5. What is the meaning of the rule of professional conduct that requires an auditor to be objective?

A. The auditor may have a material, indirect financial interest in a clients business as long as it does not affect his or her judgment.

 

B. The auditor has an obligation to CPA Canada to not use his or her training for personal advantage.

 

C. The auditor has an obligation to serve the needs of the audit client.

 

D. The auditor must have an attitude of professional skepticism toward an auditees management.

 

Accessibility: Keyboard Navigation
Blooms: Comprehension
Difficulty: Moderate
Learning Objective: 03-03 Outline the characteristics of critical thinking.
Smieliauskas Chapter 03 #5
Topic: 03-07 More on Critical Thinking
 

 

6. The CPA Ontario Rules of Professional Conduct contain both general ethical principles that are idealistic in character and also a ________.

A. list of violations that would cause the automatic suspension of a members license

 

B. set of specific, mandatory rules describing minimum levels of conduct required of members

 

C. description of the procedures to be followed by a member who must respond to an inquiry from the disciplinary committee

 

D. list of specific acts discreditable to the profession

 

Accessibility: Keyboard Navigation
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 03-04 Describe the purpose and contents of the codes of professional ethics established by the various professional accounting associations.
Smieliauskas Chapter 03 #6
Topic: 03-08 Codes of Professional Ethics
 

 

7. Which of the following items is the most important principle in the fundamental statements of accepted conduct?

A. Maintain the reputation of the profession.

 

B. Act with due care.

 

C. Maintain independence.

 

D. Act with professional courtesy.

 

Accessibility: Keyboard Navigation
Blooms: Comprehension
Difficulty: Moderate
Learning Objective: 03-04 Describe the purpose and contents of the codes of professional ethics established by the various professional accounting associations.
Smieliauskas Chapter 03 #7
Topic: 03-10 Serving the Public Interest
 

 

8. A complaint has been made against a member for an audit failure. If this complaint is found to have merit, under which CPA Ontario Rule of Professional Conduct is the member likely to be charged?

A. 202 Integrity and due care.

 

B. 204 Independence.

 

C. 210 Conflict of interest.

 

D. 215 Contingent fees.

 

Accessibility: Keyboard Navigation
Blooms: Comprehension
Difficulty: Moderate
Learning Objective: 03-04 Describe the purpose and contents of the codes of professional ethics established by the various professional accounting associations.
Smieliauskas Chapter 03 #8
Topic: 03-08 Codes of Professional Ethics
 

 

9. A succinct, but comprehensive definition of independence is that an auditor ________.

A. must be independent in fact and in appearance in order to maintain credibility

 

B. must not have a direct financial interest in a client

 

C. must have a license to practice as a public accountant

 

D. must not take on as an audit client a company owned by a member of his or her immediate family

 

Accessibility: Keyboard Navigation
Blooms: Comprehension
Difficulty: Easy
Learning Objective: 03-05 Explain the importance of an independence framework for auditors.
Smieliauskas Chapter 03 #9
Topic: 03-12 Independence and Objectivity
 

 

10. The familiarity threat refers to ________.

A. becoming too sympathetic to a clients interests

 

B. providing assurance on ones own work

 

C. promoting a clients position or opinion

 

D. benefiting from a financial interest in a client

 

Accessibility: Keyboard Navigation
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 03-05 Explain the importance of an independence framework for auditors.
Smieliauskas Chapter 03 #10
Topic: 03-12 Independence and Objectivity
 

 

11. In the course of performing an audit, an auditor begins dating the CFO of the auditee. What kind of threat to independence might arise?

A. Self-review threat.

 

B. Self-interest threat.

 

C. Familiarity threat.

 

D. Intimidation threat.

 

Accessibility: Keyboard Navigation
Blooms: Application
Difficulty: Easy
Learning Objective: 03-05 Explain the importance of an independence framework for auditors.
Smieliauskas Chapter 03 #11
Topic: 03-12 Independence and Objectivity
 

 

12. A clients management claims that they have to restrict an auditors access to a research laboratory to protect the safety of the auditor. This could be an example of a lack of ________.

A. programming independence

 

B. investigative independence

 

C. control independence

 

D. reporting independence

 

Accessibility: Keyboard Navigation
Blooms: Application
Difficulty: Moderate
Learning Objective: 03-05 Explain the importance of an independence framework for auditors.
Smieliauskas Chapter 03 #12
Topic: 03-12 Independence and Objectivity
 

 

13. According to the professions rules of conduct, an auditor would be considered independent in which of the following instances?

A. The auditor is the officially appointed stock transfer agent of a client.

 

B. The auditor has a personal chequing account in a branch of a client bank.

 

C. The client has not paid its audit fees for the past three years.

 

D. The client is the only tenant in a commercial building owned by the auditor.

 

Accessibility: Keyboard Navigation
Blooms: Application
Difficulty: Moderate
Learning Objective: 03-05 Explain the importance of an independence framework for auditors.
Smieliauskas Chapter 03 #13
Topic: 03-13 Detailed Independence Rules
Topic: 03-14 Permitted Loans
 

 

14. How can competence and due care best be described?

A. Competence and due care both refer to the PA doing their best for their clients.

 

B. Competence refers to technical ability; due care refers to strictly following official pronouncements of accounting principles.

 

C. Competence is knowing what do; due care is doing it to the best of ones abilities.

 

D. Competence and due care both refer to ongoing technical training.

 

Accessibility: Keyboard Navigation
Blooms: Comprehension
Difficulty: Easy
Learning Objective: 03-05 Explain the importance of an independence framework for auditors.
Smieliauskas Chapter 03 #14
Topic: 03-16 Professional Competence and Due Care
 

 

15. Regarding honorary positions in non-profit organizations, which of the following statements is FALSE?

A. Professional accountants can be honorary directors of charity hospitals, fund drives, symphony orchestra societies, and other non-profit organizations, as long as the position is purely honorary.

 

B. The professional accountant cannot be identified as an honorary director on letterheads and other literature.

 

C. The only form of participation is the use of the professional accountants name.

 

D. The professional accountant does not vote with the board or participate in management functions.

 

Accessibility: Keyboard Navigation
Blooms: Comprehension
Difficulty: Moderate
Learning Objective: 03-05 Explain the importance of an independence framework for auditors.
Smieliauskas Chapter 03 #15
Topic: 03-15 Other Issues Related to the Independence Principle
 

 

16. Which of the following statements regarding independence with respect to accounting and other services is FALSE?

A. If a professional accountant (PA) performs the bookkeeping and makes accounting decisions for a company and the management does not know enough about the financial statements to take primary responsibility for them, the PA cannot be considered independent for assurance services.

 

B. If a PA performs the bookkeeping and makes accounting decisions for a company and the management does not know enough about the financial statements to take primary responsibility for them, it might be perceived that the PA has both prepared the financial statements or other data and given an audit report or other assurance on his or her own work.

 

C. The PA cannot perform the bookkeeping for a company and also provide assurance services.

 

D. The PA can counsel the client management about the accounting principle choices, but in the final analysis the management must be able to say, These are our financial statements (or other data); we made the choices of accounting principles; we take primary responsibility for them.

 

Accessibility: Keyboard Navigation
Blooms: Comprehension
Difficulty: Moderate
Learning Objective: 03-05 Explain the importance of an independence framework for auditors.
Smieliauskas Chapter 03 #16
Topic: 03-15 Other Issues Related to the Independence Principle
 

 

17. In a study of law cases of accountants and auditors legal troubles, the greatest percentage arose from ________.

A. faulty implementation of audit procedures

 

B. client fraud

 

C. misinterpretation of accounting principles

 

D. fraud by the auditor

 

Accessibility: Keyboard Navigation
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 03-06 Outline auditor legal responsibilities.
Smieliauskas Chapter 03 #17
Topic: 03-20 Lawsuit Causes and Frequency
 

 

18. A private or civil wrong or injury is known as a ________.

A. breach

 

B. tort

 

C. misconduct

 

D. deceit

 

Accessibility: Keyboard Navigation
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 03-06 Outline auditor legal responsibilities.
Smieliauskas Chapter 03 #18
Topic: 03-19 The Legal Environment and Auditor Legal Responsibilities
 

 

19. In common law actions, the burden of proof lies with the ________.

A. bailiff

 

B. defendant

 

C. plaintiff

 

D. jury

 

Accessibility: Keyboard Navigation
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 03-07 Outline the various types of common law liability for public accountants; citing specific case precedents.
Smieliauskas Chapter 03 #19
Topic: 03-23 Characteristics of Common Law Actions
 

 

20. The failure to perform a duty with the requisite standard of care is known as _______.

A. lack of independence

 

B. negligence

 

C. lack of objectivity

 

D. misconduct

 

Accessibility: Keyboard Navigation
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 03-07 Outline the various types of common law liability for public accountants; citing specific case precedents.
Smieliauskas Chapter 03 #20
Topic: 03-24 Four Elements of Negligence
 

 

21. That a legal duty arises when there is a contractual agreement with the client is called ________.

A. standard of care

 

B. privity of contract

 

C. professionalism

 

D. independence

 

Accessibility: Keyboard Navigation
Blooms: Comprehension
Difficulty: Moderate
Learning Objective: 03-07 Outline the various types of common law liability for public accountants; citing specific case precedents.
Smieliauskas Chapter 03 #21
Topic: 03-24 Four Elements of Negligence
 

 

22. In addition to liabilities imposed by common law, auditors need also be concerned about what other type of liability?

A. Statutory law.

 

B. Tort law.

 

C. Professional liability.

 

D. Negligence.

 

Accessibility: Keyboard Navigation
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 03-07 Outline the various types of common law liability for public accountants; citing specific case precedents.
Smieliauskas Chapter 03 #22
Topic: 03-25 Limited Liability Partnerships
 

 

23. If a party is found to be partially liable and thus only responsible for paying part of the damages relative to their share of the blame, this is known as ________.

A. due care

 

B. breaking even

 

C. proportionate liability

 

D. a tort

 

Accessibility: Keyboard Navigation
Blooms: Knowledge
Difficulty: Moderate
Learning Objective: 03-07 Outline the various types of common law liability for public accountants; citing specific case precedents.
Smieliauskas Chapter 03 #23
Topic: 03-25 Limited Liability Partnerships
 

 

24. A letter where accountants sign that they have been notified that a particular recipient of the financial statements and audit report intends to rely upon them for particular purposes is known as a(n) ________.

A. management letter

 

B. compliance letter

 

C. reliance letter

 

D. engagement letter

 

Accessibility: Keyboard Navigation
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 03-07 Outline the various types of common law liability for public accountants; citing specific case precedents.
Smieliauskas Chapter 03 #24
Topic: 03-24 Four Elements of Negligence
 

 

25. Historically, auditors liability in Canada has been based on common law liability.

TRUE

 

Accessibility: Keyboard Navigation
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 03-01 Outline the concept of auditor responsibilities.
Smieliauskas Chapter 03 #25
Topic: 03-01 Introduction
 

 

26. An ethical dilemma is one in which the choice of alternative actions affects the well-being of other persons.

TRUE

 

Accessibility: Keyboard Navigation
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 03-02 Explain the importance of the study of ethics in helping define auditor responsibilities.
Smieliauskas Chapter 03 #26
Topic: 03-03 Overview
Topic: 03-06 Philosophical Principles in Ethics
 

 

27. Let your conscience be your guide is an ethical principle that fits all situations.

FALSE

 

Accessibility: Keyboard Navigation
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 03-02 Explain the importance of the study of ethics in helping define auditor responsibilities.
Smieliauskas Chapter 03 #27
Topic: 03-06 Philosophical Principles in Ethics
 

 

28. Consequentialism says that the right choice is the one that results in the greatest good for the greatest number of people.

FALSE

 

Accessibility: Keyboard Navigation
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 03-02 Explain the importance of the study of ethics in helping define auditor responsibilities.
Smieliauskas Chapter 03 #28
Topic: 03-06 Philosophical Principles in Ethics
 

 

29. Rules of professional conduct provide some direct solutions to specific, profession-related problems that may not be easily derived from general theories of ethics.

TRUE

 

Accessibility: Keyboard Navigation
Blooms: Comprehension
Difficulty: Easy
Learning Objective: 03-04 Describe the purpose and contents of the codes of professional ethics established by the various professional accounting associations.
Smieliauskas Chapter 03 #29
Topic: 03-08 Codes of Professional Ethics
 

 

30. The Rules of Professional Conduct, state the set of very specific rules that flow from the general principles and are considered to be minimum standards.

TRUE

 

Accessibility: Keyboard Navigation
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 03-04 Describe the purpose and contents of the codes of professional ethics established by the various professional accounting associations.
Smieliauskas Chapter 03 #30
Topic: 03-09 Rules of Professional Conduct
 

 

31. The Rules of Professional Conduct for professional accountants apply to services performed by members in both public and private practice.

FALSE

 

Accessibility: Keyboard Navigation
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 03-04 Describe the purpose and contents of the codes of professional ethics established by the various professional accounting associations.
Smieliauskas Chapter 03 #31
Topic: 03-09 Rules of Professional Conduct
 

 

32. The fundamental principles of accepted conduct are only general guidelines; therefore, they are not as important as the specific rules.

FALSE

 

Accessibility: Keyboard Navigation
Blooms: Knowledge
Difficulty: Easy
Learning Objective: 03-04 Describe the purpose and contents of the codes of professional ethics established by the various professional accounting associations.
Smieliauskas Chapter 03 #32
Topic: 03-08 Codes of Professional Ethics
 

 

33. If a professional accountant is convicted of a criminal offence or fraud, he or she is usually thrown out of the profession.

TRUE

 

Accessibility: Keyboard Navigation
Blooms: Comprehension
Difficulty: Easy
Learning Objective: 03-04 Describe the purpose and contents of the codes of professional ethics established by the various professional accounting associations.
Smieliauskas Chapter 03 #33
Topic: 03-10 Serving the Public Interest
 

 

34. The codified Rules of Professional Conduct derives its authority from the CPA Canada Handbook.

FALSE

 

Accessibility: Keyboard Navigation
Blooms: Comprehension
Difficulty: Easy
Learning Objective: 03-04 Describe the purpose and contents of the codes of professional ethics established by the various professional accounting associations.
Smieliauskas Chapter 03 #34
Topic: 03-08 Codes of Professional Ethics
 

 

35. If a public accountant (PA) performs the bookkeeping and makes accounting decisions for a company and the management does not know enough about the financial statements to take primary responsibility for them, the PA cannot be considered independent for assurance services.

TRUE

 

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