CPA Auditing and Attestation (AUD) : Ethics & Professional Responsibility
Study concepts, example questions & explanations for CPA Auditing and Attestation (AUD)
All CPA Auditing and Attestation (AUD) Resources
Example Questions
Example Question #5 : Ethics Sec & Pcaob
Under the SOX 2002 provisions, registered public accounting firms are required to prepare and maintain audit work papers and other info related to any audit for a period of:
3 years
1 year
7 years
5 years
7 years
Registered firms are required to maintain these work papers for a period of 7 years.
Example Question #6 : Ethics Sec & Pcaob
Of the following audit clients, which client's engagement would have to be conducted under SEC or PCAOB regulations and procedures?
A governmental entity
ABC LP
A corporation listed on the New York Stock Exchange
A family owned and run electrician business
A corporation listed on the New York Stock Exchange
Only a public company or issuer would have to obey these procedures.
Example Question #1 : Ethics Gao And Dol
The GAO professional framework includes
Setting financial policy
Setting budgetary standards
Setting audit standards
Applying safeguards
Applying safeguards
The GAO professional framework includes the application of appropriate safeguards. As stated under Governmental Accounting Standards section 3.08, “Auditors should apply the conceptual framework at the audit organization, audit, and individual auditor levels to apply safeguards as necessary to eliminate the threats or reduce them to an acceptable level.”
Example Question #2 : Ethics Gao And Dol
A member is serving as an engagement partner. He invests heavily and has a portfolio of government bonds of a government client. This is an example of a:
Bias Threat
Financial threat
Structural Threat
Familiarity Threat
Financial threat
The partner's investment in government bonds of a governmental client creates a financial threat. This threat falls under the self-interest threat as expressed in the GAO Conceptual Framework Standards: “Self-interest threat - the threat that a financial or other interest will inappropriately influence an auditor’s judgment or behavior.”
Example Question #3 : Ethics Gao And Dol
Internal auditors are considered independent for internal reporting purposes:
never
If they are accountable to the government entity head
If they are an agency head
If employed by the audit firm
If they are accountable to the government entity head
Internal auditors that are accountable to the government agency head are considered independent for internal reporting purposes. Under section 3.31 of GAGAS; “Certain entities employ auditors to work for entity management. These auditors may be subject to administrative direction from persons involved in the entity management process. Such audit organizations are internal audit functions and are encouraged to use the Institute of Internal Auditors (IIA) International Standards for the Professional Practice of Internal Auditing in conjunction with GAGAS. In accordance with GAGAS, internal auditors who work under the direction of the audited entity’s management are considered independent.”
Example Question #4 : Ethics Gao And Dol
GAGAS specifically include all of the following ethics principles except:
Proper use of government information
Serving the public interest
Integrity
Fraud detection
Fraud detection
GAGAS ethics do not include specific references to fraud detection. Ethics covers the public interest, integrity, and proper usage of information.
Example Question #5 : Ethics Gao And Dol
The GAGAS framework for independence identifies inappropriate influence on auditor judgment or behavior caused by a financial or other interest as a:
Self review threat
Bias threat
Management participation threat
Self interest threat
Self interest threat
The self-interest threat is that a financial or other interest will influence an auditor's judgment or behavior inappropriately.
Example Question #6 : Ethics Gao And Dol
Of the following threats to independence identified by GAGAS related to a threat of external influence?
Undue influence threat
Structural threat
Familiarity threat
Self-interest threat
Undue influence threat
The undue influence threat relates to how an external factor can impact an auditor's independence.
Certified Tutor
All CPA Auditing and Attestation (AUD) Resources
