Area 1: Ethics

A CPA firm is auditing a large public company. The audit partner's spouse has just been promoted to a new role at the audit client. Under which of the following scenarios would the firm's independence be considered IMPAIRED according to AICPA and PCAOB independence rules?

During the acceptance phase of a new audit engagement for a private company, the successor auditor requests permission to make inquiries of the predecessor auditor. The potential client refuses to grant permission. What is the most appropriate course of action for the successor auditor?

A CPA firm is designing its system of quality control. Which of the following policies would most likely satisfy the element of 'Engagement Performance' regarding consultation?

An auditor is establishing an understanding with a client regarding the services to be performed for a non-issuer. Which of the following must be included in the engagement letter?

Under the AICPA Code of Professional Conduct, which of the following fee arrangements is prohibited for an audit client?

An auditor is documenting the results of an audit engagement. According to auditing standards, which of the following is the primary requirement regarding the completion of audit documentation?

Which of the following situations most likely represents a violation of the AICPA Code of Professional Conduct regarding 'Acts Discreditable'?

In an audit of a non-issuer, the auditor discovers a material weakness in internal control. The auditor is not engaged to perform an audit of internal control over financial reporting. Which of the following is the auditor's responsibility regarding communication?

Which of the following statements best describes the concept of 'Professional Skepticism' as defined in auditing standards?

A CPA firm is subject to the independence rules of the Government Accountability Office (GAO) because it audits a government entity. Which of the following non-audit services would most likely impair independence under the GAO 'Yellow Book' standards?

According to the AICPA Code of Professional Conduct, which of the following actions by a CPA would be considered a violation of the 'Integrity and Objectivity' rule?

Which of the following statements is true regarding the auditor's communication with those charged with governance (the Audit Committee)?