Module 21 Professional Responsi Ilities: MU EA

MODULE 21 PROFESSIONAL RESPONSIBILITIES
8 MULTIPLE-CHOICE ANSWERS*
2
I. c - - 1 a - - 3 d - - 4 d - - 6 d -
2. d - - 6.
17. ,d - - I.
32. a - - 6.
47. a - - I. b
62. -
-
b -
3. - - 18. b - - 33. b - - 48. d - - 63. c
- -
4. c - - 19. d - - 34. a - - 49. b - - 64. b
- -
5. c - - 20. c - - 35. c - - 50. c - - 65. c - -
6. a - - 2I. a - - 36. b - - SI. b - - 66. c
- -
7. d - - 22. d - - -37. a - - 52. d - -
8. c - - 23. d - - 38. a - - 53. c - -
9. b - - 24. c - - 39. b - - 54. d - -
,
10. a 25. a 40. c 55. d
- - - - - - - -
lI. a - - 26. Cl - - 4I. c - - 56. a - -
12. a - - 27. c - - 42. c - - 57. a - -
13. b - - 28. c - - 43. b - - 58. b - -
14. b - - 29. a - - 44. d - - 59. c - - 1st: _/66= %
c -
15. - - 30. c - - 45. c - - 60. a - - 2nd: ~66= %
-
MULTIPLE-CHOICE ANSWER EXPLANATIONS
A.2. Code of Professional Conduct-Principles statements. This is a key position as defined by the
Interpretation of Rule 10 1.
1. Cc) The requirement is to identify the statement that 6. (a) According to Rule 102 of the Code of Profes-
best describes the meaning of generally accepted auditing sional Conduct, in performing any professional service, a
standards. Answer Cc) is correct because generally accepted member shall maintain objectivity and integrity, avoid con-
auditing standards deal with measures of the quality of the flicts of interest, and not knowingly misrepresent facts. An-
performance of audit procedures CAU 150). Answer (d) is swer (a) is correct as. this would be knowingly misrepre-
incorrect because procedures relate to acts to be performed,
senting the facts. Answers (b) and (d) are incorrect as these
not directly to the standards. Answer (b) is incorrect be-
cause generally accepted auditing standards have been is- are not intentional misstatements. Answer (c) is incorrect
sued by predecessor groups, as well as by the Auditing because while one must remain objective" while performing
Standards Board. Answer (a) is incorrect because there may consulting services, independence is not required unless the
or may not be universal compliance with the standards. CP A also performs attest services for that client.
2. (d) All of these can result in the automatic expul-
sion of the member from the AICPA. Answer (a) is incor- 7. (d) The requirement is to determine which act is
rect because although the conviction of a felony can result in generally prohibited. Answer (d) is correct because "If an
automatic expulsion, likewise can the other two. An- engagement is terminated prior to completion, the member is
swers (b) and Cc) are incorrect because all three can result in required to return only client records" (ET 501). Answer (a)
automatic expulsion from the AICPA. is incorrect because issuing a modified report explaining a
A.3. Code of Professional Conduct-Rules, Interpreta- failure to follow a governmental regulatory agency's stan-
dards when conducting an attest service is not prohibited.
tions, and Rulings
Answer (c) is incorrect because accepting a contingent fee is
3. (b) Answer (b) is correct because an effective , allowable when representing a elient in an examination by a
corporate governance structure is a control that can be revenue agent of the client's federal or state income tax re-
implemented by a client that increases independence of the turn (ET 302). Answer (b) is incorrect because revealing
attest team. Answer (a) is incorrect because it is a safeguard confidential client information during a quality review of a
that is implemented by regulation or the CP A firm. Answer professional practice by a team from the state CP A society is
Cc) is incorrect because it is a safeguard that is required by not prohibited (ET 301).
regulation or the CPA firm. Answer (d) is incorrect because
8. (c) According to Rule 203 of the Code of Profes- '
it represents a threat rather than a safeguard.
sional Conduct, CP As are allowed to depart from a GASB
4. (c) Answer (c) is correct because the team member Statement only when results of the Standard would be \
would be reviewing his or her own work. Answer (a) is misleading. Examples of possible circumstances justifying
incorrect because this is an example of a familiarity threat. departure are new legislation and a new form of business
Answer (b) is incorrect because this is an example of a transaction.
safeguard to threats to independence. Answer (d) is
incorrect because this represents a financial self-interest 9. (b) The requirement is to determine whether aCPA
threat to independence. may hire a non-CPA systems analyst and, if so, under what
conditions. Answer (b) is correct because ET 291 allows
5. (c) According to the Code of Professional Conduct, such a situation when the CP A is qualified to supervise and
Rule 101 regarding independence, a spouse may be evaluate the work of the specialist. Answer (a) is incorrect
employed by a client if s/he does not exert significant because the CP A need not be qualified to perform the spe-
influence over the contents of the client's financial cialist's tasks. Answer (c) is incorrect because non-CPA
professionals are permitted to be associated with CP A firms
* Explanation of how to use this performance record appears on page 12.

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MODULE 21 PROFESSIONAL RESPONSIBILITIES

* Explanation of how to use this performance record appears on page 12.

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