Business Ethics subject

11-Objectivity may be impaired when a CPA prepares a tax return for a client because:

-The CPA serves in a tax advocacy position for the client

-The CPA must prepare the tax return solely based on the information provided by the client

-The CPA violates the independence rule

-The CPA violates the integrity rule

12-Common judgment traps include:

-Group think, judgment triggers, and a rush to solve problems

-Systems 1 thinking, cognitive dissonance, a rush to solve problems

-Reacting to pressures, a rush to solve problems, and Systems 1 thinking

-Group think, judgment triggers, and reacting to pressures

13-Circular 230 applies to CPAs who:

-Practice before the SEC

-Practice before the IRS

-Audit the financial statements of a tax client

-Prepare tax services for clients

14-Which of the following is NOT an example of a conflict of interest?

-Accepting commissions in a financial planning engagement for a nonaudit client

-Advising two clients at the same time who are competing to acquire the same company when the advice might be relevant to the parties' competitive positions

-Providing tax or personal financial planning services for several members of a family whom the CPA knows to have opposing interests

-Advising a client to invest in a business in which, for example, the immediate family member of the CPA has a financial interest in the business

15-An example of a management participation threat is:

-Initiating litigation against the client

-Establishing and maintaining internal controls for the client

-Preparing source documents used to generate the client's financial statements

-Establishing and maintaining the budget for audit completion

16-Which of the following is NOT an outright restriction on providing nonattest services for an attest client?

-Financial information systems design and implementation

-Tax services

-Internal audit outsourcing services

-Appraisal or valuation services