Circular 230 is Department of Treasury regulation which provides rules for practicing before the Internal Revenue Service.   Question 13 options:   True   False

Which of the following items make up the legislative history of a tax law?   Question 22 options:   Congressional floor debate   IRS Publications   Circular 230   All of the above

Statement I: If an agent acts in his name, the principal shall have a right of action against the persons with whom the agent has contracted. Statement II: Should there be a stipulation that the agent shall advance the necessary funds, he shall be bound to do so even if the principal is insolvent.    Only Statement I is true. Only Statement II is true. Both statements are true. Both statements are false.

1)List and explain the General Standards. 2)What are the Auditor’s Liabilities under Common Law and Contract Law. 3) What are the Auditor’s Liabilities under Statutory Law (SEC Acts and Other Acts of Congress).   Securities Act 1933:   Securities & Exchange Act 1934:   Foreign Corrupt Practices Act (1977):   Private Securities Litigation Reform Act (1995/1998):   Sarbanes-Oxley Act (2002):

A9

A CPA –    (a)  may use a client’s estimate of dollar amounts in preparing a tax return only if the client provides a sworn affidavit stating that supporting documents are lost.    (b)  generally may use a client’s estimated amounts in preparing a tax return sub-ject to determining that the amounts are reasonable based on all known facts.    (c)  may use her / his own estimate of some dollar amount if the client’s estimate is deemed to be either inadequate or excessive.   (d)  may never under any circumstances put an estimated amount on a client’s tax return and in fact would risk (i) losing her / his state CPA license and/or (ii) criminal sanctions imposed by the IRS for doing so.

Under which act (or acts) must a client prove that a CPA has performed an audit with due diligence to establish that CPA's liability? Securities Securities Exchange Act of 1933 Act of 1934 Yes A. Yes B. Yes No C. No Yes D. No No Multiple Choice 22

Question 1 For each of the following scenarios, indicate whether in your opinion it is a violation of the HKICPA Code of Ethics. Specifically, for each scenario, choose one of the following options: (1) not likely to be a violation; (2) likely to be aviolation; or (3)clearly a violation. For each scenario, clearly explain your reasoning. 1.→Tong and Tong CPAS recently completed the audit of the Michaels Corporation and- issued an unqualified opinion on the financial statements. Subsequent to the issuance of the financial statem ents and auditor'sreport, the Securities and Futures Commission: (SFC) initiated an investigation into possible illegal acts engaged in by Michaels Corporation, andhas requesteda copy of all the auditing documentation prepared by: Tong and Tong. Michaels Corporation has contacted Tong and Tong and threatenedto: take legal action against the audit firm if the auditors provide the auditing documentation to the SFC. Michaelsmaintains that the information is…

Question 3 State the principal aspects which the statutory auditor should look into before framing an opinion on finalization of audit of accounts

The Administrative Procedure Act requires Federal Agencies to follow certain procedures to make their rules enforceable.  true or false?