ACC 5335 Gleim 111 Final Questions With Correct And Complete Answers|33 Pages
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Course
ACC 5335
Institution
ACC 5335
Which of the following violates the AICPA's Code of Professional Conduct?
Answers
A.A member not in public practice is a bank controller who is designated as a CPA on bank stationery and in bank advertisements listing officers of the bank.
B.A member contracts with a service entity to maintain a...
ACC 5335 Gleim 111 Final Questions
Which of the following violates the AICPA's Code of Professional Conduct?
Answers
A.A member not in public practice is a bank controller who is designated as a CPA on bank stationery
and in bank advertisements listing officers of the bank.
B.A member contracts with a service entity to maintain a client's computer hardware and charges the
client a higher servicing fee than that charged to the member by the service provider.
C.A partner in a CPA firm is elected to public office. After her withdrawal from the firm, the remaining
partners continue to use a firm name that includes her name.
D.A member shares offices with another member. Their joint letterhead implies that a partnership exists
when each member is in fact practicing individually. - ✔ ✔ D
Which rule is included in the Code of Professional Conduct?
Answers
A.Incompatible Occupations.
B.Integrity and Objectivity.
C.Offers of Employment.
D.Encroachment. - ✔ ✔ B
Which rule is not included in the Code of Professional Conduct?
Answers
A.Acts Discreditable.
B.Advertising and Other Forms of Solicitation.
C.Commissions.
D.Incompatible Occupations. - ✔ ✔ D
With respect to records in a CPA's possession, the Code of Professional Conduct provides that
Answers
,A.An auditor may retain client-provided records if fees due with respect to a completed engagement
have not been paid.
B.Worksheets in lieu of a general ledger belong to the auditor and need not be furnished to the client
upon request.
C.Extensive analyses of inventory prepared by the client at the auditor's request are working papers that
belong to the auditor and need not be furnished to the client upon request.
D.The auditor who has provided records to a client must comply with any subsequent requests to again
provide such information. - ✔ ✔ C
Within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, an accountant
deemed to be independent with regard to a specific entity must
Confirm in writing its independence from the audit client.
Have no relationships with the audit client.
Discuss its independence with the audit committee.
Answers
A.I and II only.
B.I and III only.
C.II and III only.
D.I, II, and III. - ✔ ✔ B
A CPA purchased stock in an audit client corporation and placed it in a revocable educational trust for
the CPA's dependent minor child. The trust securities were not material to the CPA but were material to
the child's personal net worth. Is the independence of the CPA considered to be impaired with respect
to the client?
Answers
A.Yes, because the stock is considered a direct financial interest and, consequently, materiality is not a
factor.
B.Yes, because the stock is considered an indirect financial interest that is material to the CPA's child.
C.No, because the CPA is not considered to have a direct financial interest in the client.
,D.No, because the CPA is not considered to have a material indirect financial interest in the client. - ✔
✔ A
A CPA serves on a governmental board, discloses that status to concerned parties, and participates as a
board member in a decision involving a client. Under the Integrity and Objectivity Rule,
Answers
A.Consent of all appropriate parties eliminates the impairment of objectivity but not of independence.
B.Consent of all appropriate parties eliminates the impairment of objectivity and of independence.
C.Disclosure without consent was sufficient to eliminate the impairment of objectivity.
D.Consent of all appropriate parties does not eliminate the impairment of objectivity. - ✔ ✔ A
A CPA serving as a bank director should not be concerned with
Answers
A.A possible conflict of interest between the bank and the CPA's clients.
B.The compatibility of serving as a bank director and the possibility of soliciting clients.
C.The CPA's independence with respect to a client's receiving a large loan from the bank.
D.Disclosure of confidential client information to the bank. - ✔ ✔ B
A CPA should not express an opinion on the financial statements of a client unless (s)he is independent
of the client. Independence is not considered impaired if the auditor
Answers
A.Has an immaterial indirect interest in the client.
B.Has a material, closely held business investment with a vice president of the client.
C.Has an unsecured loan acquired from a major shareholder of the client.
D.Was a trustee with investment decision-making authority of a trust that was committed to acquire a
direct financial interest in the client. - ✔ ✔ A
A CPA who agrees to perform professional services
Answers
A.Must have the knowledge required to complete the services prior to acceptance.
, B.Demonstrates a lack of competence if consultation with others is necessary during the performance of
the services.
C.Assumes a responsibility for infallibility of knowledge and judgment.
D.Should, if unable to gain sufficient competence during performance, suggest to the client someone
competent to perform the services. - ✔ ✔ D
A CPA who has a direct financial interest in a nonclient having a material investment in the CPA's audit
client
Answers
A.Lacks independence only if the CPA's investment in the nonclient is material.
B.Lacks independence only if the CPA can exercise significant influence over the nonclient.
C.Lacks independence.
D.Does not lack independence. - ✔ ✔ C
A CPA who is employed by a nonaccounting corporation performs services for the employer, including
auditing the employer's financial statements. Reports issued with respect to such activities are
distributed with the CPA's name and CPA designation appearing on the corporate letterhead. These
reports should
Answers
A.Be restricted to internal use.
B.Make no reference to GAAS.
C.Be on plain paper (not on the corporate letterhead).
D.Refer to an audit. - ✔ ✔ B
A CPA who performs primary actuarial services for a nonissuer client normally is precluded from
expressing an opinion on the financial statements of that client if the
Answers
A.Fees for the actuarial services have not been paid.
B.Actuarial services are a major determinant of the pension expense.
C.CPA prepared an actuarial report using assumptions not approved by the client.
D.Actuarial assumptions used are not in accordance with GAAS. - ✔ ✔ C
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