Principles Of Auditing & Other Assurance Services
21st Edition
ISBN: 9781259916984
Author: WHITTINGTON, Ray, Pany, Kurt
Publisher: Mcgraw-hill Education,
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Question
Chapter 3, Problem 34DOQ
To determine
Identify the appropriate answer that is most likely to be considered in violation of the AICPA Independence Rule in which of the following instances.
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Which action is not considered an act discreditable to the accounting profession? a) Being finally determined by a court of competent jurisdiction to have violated any of the federal antidiscrimination laws. b) Having a bank collect notes received from a client in payment of fees. c) Failing to follow standards and procedures established by governmental agencies in audits of grants by those agencies. d) Negligently permitting another to sign a document containing materially false and misleading information.
When a CPA knows that a tax client has skimmed cash receipts and not reported the incomein the federal income tax return but signs the return as a CPA who prepared the return, theCPA has violated which of the following AICPA rules of conduct?a. The Confidential Client Information Rule.b. The Integrity and Objectivity Rule.c. The Independence Rule.d. The Accounting Principles Rule
According to the Code of Professional Conduct of the AICPA, for which type of service may a CPA
receive a contingent fee?
O Performing an audit of a financial statement.
O Performing a review of a financial statement.
O Performing an examination of a prospective financial statement.
O Seeking a private letter ruling.
Chapter 3 Solutions
Principles Of Auditing & Other Assurance Services
Ch. 3 - What is meant by the term ethical dilemma?...Ch. 3 - What are the two major types of constraints on...Ch. 3 - Prob. 3RQCh. 3 - Prob. 4RQCh. 3 - Prob. 5RQCh. 3 - Prob. 6RQCh. 3 - Prob. 7RQCh. 3 - Bill Scott works as a manager in the Phoenix...Ch. 3 - Prob. 9RQCh. 3 - Prob. 10RQ
Ch. 3 - Prob. 11RQCh. 3 - Prob. 12RQCh. 3 - Prob. 13RQCh. 3 - Prob. 14RQCh. 3 - Prob. 15RQCh. 3 - Prob. 16RQCh. 3 - Prob. 17RQCh. 3 - Prob. 18RQCh. 3 - Prob. 19RQCh. 3 - Prob. 20RQCh. 3 - Prob. 21RQCh. 3 - Prob. 22RQCh. 3 - Prob. 23RQCh. 3 - Prob. 24RQCh. 3 - Prob. 25RQCh. 3 - Prob. 26RQCh. 3 - Prob. 27QRACh. 3 - Prob. 28QRACh. 3 - Prob. 29QRACh. 3 - Prob. 30QRACh. 3 - Prob. 31QRACh. 3 - Prob. 32QRACh. 3 - Ron Barber, CPA, is auditing the financial...Ch. 3 - Prob. 34AOQCh. 3 - Prob. 34BOQCh. 3 - Prob. 34COQCh. 3 - Prob. 34DOQCh. 3 - Prob. 34EOQCh. 3 - Prob. 34FOQCh. 3 - Prob. 34GOQCh. 3 - Prob. 34HOQCh. 3 - Prob. 34IOQCh. 3 - Prob. 34JOQCh. 3 - Prob. 34KOQCh. 3 - Prob. 34LOQCh. 3 - Prob. 35OQCh. 3 - Prob. 36OQCh. 3 - Prob. 37OQCh. 3 - Prob. 38OQCh. 3 - Prob. 39OQCh. 3 - Prob. 40OQCh. 3 - Prob. 41OQCh. 3 - Prob. 42OQCh. 3 - Gary Watson, a graduating business student at a...Ch. 3 - Prob. 44PCh. 3 - Prob. 45PCh. 3 - Prob. 46PCh. 3 - Prob. 47PCh. 3 - Prob. 48PCh. 3 - Prob. 49ITCCh. 3 - Prob. 50ITCCh. 3 - Prob. 51RDC
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Similar questions
- The Sarbanes–Oxley Act of 2002 prohibits public accounting firms from providing which ofthe following services to an audit client?a. Bookkeeping services.b. Internal auditing services.c. Valuation services.d. All of the above.arrow_forwardAccording to the AICPA Code of Professional Conduct, which of the following actions will impair independence? A. Preparing client financial statements based on information in a trial balance. B. Processing payroll for a client's signature based on client record keeping. C. Participating in the hiring or termination of a client's employees. D. Assisting a client in drafting a stock-offering document or memorandom.arrow_forwardWhich of the following is a provision of the Sarbanes-Oxley Act? a. Lessens penalties for corporate fraud b.Developed the Consumer Financial Protection Bureau c. Recommends codes of ethics for financial reporting in corporations d. Makes fraudulent financial reporting a civil offense e.Requires greater transparency in financial reportingarrow_forward
- The Sarbanes–Oxley Acta. requires the SEC to establish a federaloversight board for the accounting industry.b. requires CEOs to certify periodic financialstatements.c. subjects auditors, accountants, andemployees to imprisonment for destroyingfinancial documents.d. prohibits many types of consulting servicesby accounting firms.e. All of the above are true.arrow_forwardWhat organizations and agencies have rules of conduct that you must observe when you practice(a) public accounting, (b) internal auditing, (c) management accounting, and (d) fraud examination?arrow_forwardGive an explanation of the legal foundation for suing a CPA. What defenses does the auditor have to counter such accusations? What is the relationship between these defenses and adherence to the accounting profession's ethical standards?arrow_forward
- Accounting firms may not audit the corporation for which they provide regular accounting services. True or False?arrow_forwardThe Sarbanes–Oxley Act of 2002 generally prohibits public accounting firms froma. Acting in a managerial decision-making role for an audit client.b. Auditing the firm’s own work on an audit client.c. Providing tax consulting to an audit client without audit committee approval.d. All of the above.arrow_forwardb) The IESBA Code of Ethics for Professional Accountants highlights a number of areas in which threats might arise to independence and objectivity. Required; i. Explain what is meant by an advocacy threat and give an example of a situation which may create an advocacy threat. ii. State the category of threat that arises from an inappropriately close business relationship with a client and give two examples of close business relationships that would cause such a threat. c) An audit is one type of assurance engagement, but practitioners may carry out other assurance engagements, such as review engagements. Required; Describe a review engagement and explain the level of assurance given in such an engagement. d) Explain the terms `accountancy', `stewardship' and `agency' and explain how they can be applied to the relationship between directors and shareholders.arrow_forward
- According to the standards of the profession, which of the following circumstances will prevent an auditor performing audit engagements from being independent? a.The auditor's brother is the Operations Manager of the firm's client being audited by a team of which the said auditor is not a part of. b.The auditor obtained an automobile loan from a bank which is a client of another auditing firm. c.The auditor's spouse is employed as the Director of finance department of the company the said auditor is currently auditing. d.The auditor's auditing firm is involved in litigation with a previous client relating to billing for consulting services for which the amount involved is insignificant to the firm and to the client company.arrow_forwardThere are specific regulatory obligations that are imposed on Accountants in relation to detectingand reporting money laundering activities. You have been asked to provide a trainingsessiondraft to new Audit Juniors on Accountants responsibilities to the subject matter. Required: a. Explain the term money laundering and furnish them with critical examples and illustrationsb. Explain the policies and procedures that a Fim of Chartered Accountants could use todemonstrate their responsibilities to detecting or avoiding the incidence of moneylaunderinarrow_forwardWhat is the law that protects investors from fraudulent financial accounting activity? FASB SACS SOX CPASarrow_forward
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