Principles of Auditing & Other Assurance Services (Irwin Accounting)
20th Edition
ISBN: 9780077729141
Author: Ray Whittington, Kurt Pany
Publisher: McGraw-Hill Education
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Chapter 3, Problem 34COQ
To determine
Identify the appropriate answer that violated the AICPA Code of Professional Conduct in determining its fee.
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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
An auditor knew that the purpose of her audit was to render reasonable assurance on financial statements that were to be used for the application for a loan; the auditor did not know the identity of the bank that would eventually give the loan. Under the Restatement of Torts approach to liability, the auditor is generally liable to the bank which subsequently grants the loan for:
Chapter 3 Solutions
Principles of Auditing & Other Assurance Services (Irwin Accounting)
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. 47ITCCh. 3 - Prob. 48ITCCh. 3 - Prob. 49RDC
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Similar questions
- According to the Acts Discreditable Rule for accountants in public practice, which of thefollowing is not a “discreditable act”?a. Withholding a client’s sales records.b. Failing to file or remit tax payments.c. Failing to follow requirements of the PCAOB during the audit of an SEC client.d. Advertising that indicated the firm can reduce IRS penalties.arrow_forwardAccounting firms may not audit the corporation for which they provide regular accounting services. True or False?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_forward
- Which of the following acts by a CPA would be most likely to be a violation of the AICPA Code of Professional Conduct? Select one: A “covered member” owns an immaterial amount of stock in an audit client. Accepting a fee in a tax matter that is contingent upon the result of an administrative proceeding. Assisting a client in preparing a financial forecast. Forming a professional corporation to practice as a CPA.arrow_forwardWhen creditors who relied on an entity’s audited financial statements suffer monetary lossesafter a customer (the auditors’ client) goes bankrupt, what must the plaintiff creditors in alawsuit for damages show in a court that follows the doctrine in Credit Alliance?a. The auditors knew and specifically acknowledged identification of the creditors.b. The auditors could reasonably foresee them as beneficiaries of the audit because entitiessuch as this client use financial statements to obtain credit from vendors.c. The plaintiffs were foreseen users of the audited financial statements because they werevendors of long standing.d. All of the abovearrow_forwardUnder which of the following circumstances would a disclaimer of opinion not beappropriate?(1) The auditor is unable to determine the amounts associated with an employeefraud scheme.(2) Management does not provide reasonable justification for a change in accountingprinciples.(3) The client refuses the auditor permission to confirm certain accounts receivableor apply alternative procedures to verify their balances.(4) The chief executive officer is unwilling to sign the management representationletter.arrow_forward
- 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.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_forwardWhy do you think the SEC requires companies to disclose fees paid to independent accountingfirms for audit and consulting services? What must be disclosed?arrow_forward
- What does a third-party user of financial statements have to prove under common law in a suit against an auditor for the auditor's negligence?arrow_forwardThe 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_forwardWhich statement about the SEC independence rules on bookkeeping services is not accurate? a) Bookkeeping services are prohibited even if the client approves the books and records as the services are performed. b) Bookkeeping services are permitted if the individuals performing these services perform no other services. c) Bookkeeping services are prohibited in most circumstances under the SEC's independence rules. d) Bookkeeping services are prohibited even if the fees from these services are less than the audit fee.arrow_forward
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