bUSINESS ETHIC SUBJECT

41-The failure of Lehman Brothers was due in large part to:

Aggressive valuation of marketable securities

Use of Repo 105 transactions

Understating allowance for loan losses

Accelerating recording revenue into an earlier period than warranted

42-Under the Sarbanes-Oxley Act, the auditor's responsibility with respect to internal controls can best be stated as:

Develop a system of internal controls that help to prevent and detect fraud

Prepare a report on internal controls to be provided to management

Assess management's report on internal controls

Assess whether the internal controls help to prevent and detect fraud

43-Safeguards implemented by the attest client include each of the following except:

Management participation in the client by the attest firm

Policies and procedures to address ethical conduct

Proper oversight by client management

The tone at the top set by executive management

44-The confidentiality standard in the AICPA code provides a blanket exception to the rule in each of the following situations except:

To provide information to the PCAOB in its inspection process

In response to a validly issued court summons

In response to a successor auditor's request

To defend oneself in an ethics investigation

45-The requirement that there should be reasonable support for a tax return position before a CPA recommends it to a client most directly aligns with which tax standard?

Contingent fees cannot be accepted when providing tax services for an audit client

The tax return should not be based on a frivolous position

It is more likely than not that the tax position will be upheld if challenged

There is a realistic possibility of success if the tax position is challenged