34. Rule 201 - General Standards explicitly requires which of the following

a. due professional care

b. infallibility.

c. adequate technical training and proficiency.

d. all of the above

e. Both a. and c. above.

35. Causey Industries engages Bragg & Co., CPAs to prepare its annual financial statements and tax return. Before either of these engagements is completed, Causey terminates the relationship and asks the firm to provide all records that the client provided for the firm, the firms working papers, and its partially completed work product. Causey has not paid the firm for either service. Under the AICPA rule on client record requests, which records, if any, may the firm withhold from the client?

a. client provided records.

b. client records prepared by the firm

c. any records the firm chooses to withhold

d. no records may be withheld from the client

36. One of the primary uses of the Conceptual Framework for AICPA Independence Standards is that members should use the Framework to:

a. Reach more favorable conclusions than the interpretations and rulings in the Code of Professional Conduct.

b. Evaluate independence matters not addressed in the Code of Professional Conduct

c. Gain deeper understanding of the rules on confidential client information and acts discreditable, among others

d. More easily interpret conflicts of interest and subordination of judgment by a member.

37. The AICPA Code of Professional Conduct requires compliance with accounting principles promulgated by the body designated by AICPA Council to establish such principles. The pronouncements comprehended by the code include all of the following except

a. opinions issued by the Accounting Principles Board.

b. interpretations issued by the Financial Accounting Standards Board.

c. AICPA Accounting Research Studies.

d. AICPA Accounting Research Bulletins.

38. Which of the following statements is correct?

a. Non-audit services that are not prohibited by Sarbanes-Oxley or the SEC rules must be approved by management of the client.

b. Non-audit services that are not prohibited by Sarbanes-Oxley or the SEC rules must be approved by staff of the PCAOB.

c. Non-audit services that are not prohibited by Sarbanes-Oxley or the SEC rules must be approved by staff of the PCAOB and the SEC.

d. Non-audit services that are not prohibited by Sarbanes-Oxley or the SEC rules must be approved by the companys audit committee.

39. The CFO of an audit client of DiGregorio and Simpson, CPAs was a partner if the firm three years ago. Which of the following is true regarding this matter.

a. This type of situation takes place all of the time. People are free to change jobs. This does not pose a threat to independence.

b. The situation poses an advocacy threat that cannot be mitigated through safeguards. DiGregorio and Simpson would need to advise the client that the firm can no longer perform audit services.

c. The situation poses an advocacy threat that could be mitigated through safeguards.

d. The situation poses a familiarity threat that could be mitigated through safeguards.

e. The situation poses a familiarity threat that cannot be mitigated through safeguards. DiGregorio and Simpson would need to advise the client that the firm can no longer perform audit services.

40. A nonpublic company has engaged a CPA firm to provide management advisory services. Following are several characteristics of the engagement:

1. the CPA firm audits the financial statements of a subsidiary of the prospective client.

2. recommendations made by the CPA firm are to be subject to review by the client.

3. the proposed engagement is not accounting-related.

1. The CPA firm is in violation of independence rules because of all of the above.
2. The CPA firm is in violation of independence rules because of # 1 above.
3. The CPA firm is in violation of independence rules because of #s 1 and 2 above.
4. The CPA firm is in violation of independence rules because of # 2 above.
5. The CPA firm is not in violation of independence rules based on the information above.

41. Generally, loans between a CPA firm or its members and an audit client are prohibited because they create a financial relationship. Which of the following is (are) exception(s) to this rule?

a. An automobile loan obtained through normal lending practices fully collateralized by the automobile.

b. Home mortgage obtained through normal lending practices of a lending institution before becoming an attest client.

c. An unpaid credit card balance of $20,000.

d. All of the above are exceptions to the rule.

e. Both a. and b. above are exceptions to the rule

42. A CPA provides working papers without specific client permission to a CPA firm that has purchased her entire practice. Which of the following statements accurately describes the situation?

a. The CPA has violated confidentiality rules because she has not obtained permission.

b. The CPA has violated confidentiality rules but cannot be disciplined because she no longer owns the firm.

c. The CPA has not violated confidentiality rules because her entire practice was purchased.

d. The CPA has not violated confidentiality rules because the purchasing firm is also a CPA firm and has the same confidentiality requirements that she had.

43. Which of the following is not defined as an act discreditable in either the Rules or the Interpretations of the AICPAs Code of Professional Conduct?

a. The CPA firm has issued the standard unqualified audit report after auditing a governmental agency, although GAAS was not followed because the government required procedures different from GAAS.

b. The CPA firm discriminates in its hiring practices based on the age of the applicant.

c. The CPA retains the clients books and records to enforce past-due payment of the CPAs bill, even after the client has demanded they be returned.

d. The CPA firms partner-in-charge was arrested recently on his way home from the firms holiday party. He was a passenger in a car driven by his wife and she was charged with driving while intoxicated. He was also arrested and charged with lewd and indecent gestures towards an officer of the law and rowdy behavior.