QUESTION 10 CPA Carlos Santana is the auditor of Matchbox Twenty Corp (MTC). According to AICPA rules, independence will not be impaired on the MTC audit if: a. Santana opens a recording studio as a silent partner with the controller of MTC in a different city. b. Santana owns $5,000 of MTC stock. c. One of Santana's fellow partners, who does not work on the MTC audit, and is in a different office, has an immaterial direct financial interest in MTC. d. Santana's wife works in the accounting group at MTC. e. None of the responses are correct. QUESTION 11 Assume you are the auditor working on the Samsung year-end audit for 2022. Which of the following procedures would provide the least reliable evidence regarding the disclosure, completeness \& valuation of contingent liabilities that exist at the balance sheet date? a. Inclusion of a statement regarding the adequate disclosure of contingencies, litigation, etc, in the management representation letter which management signs. b. Inquiring of management as to the completeness of contingent liability disclosures and the existence of outstanding claims. c. Sending attorney letters to all attorneys with whom the client has worked in the prior year. d. Reviewing 2022 legal expense file. QUESTION 12 In determining whether or not to accept an audit engagement, when the CPA is not independent with respect to a client due to a financial relationship, the CPA must: a. Not accepting the audit engagement unless the financial relationship is eliminated. b. Provide a review report instead. c. Issue a disclaimer of opinion and include a separate paragraph in the audit report explaining the lack of independence. d. All of the responses are correct. QUESTION 13 Dara \& Co. audits Hill Corporation. Ellie, the engagement partner on the audit, works in the Raleigh office of the Firm. which of the following would not be considered a covered member who would comprise independence on the Hill Corporation audit? a. Jason, who is a member of the attest engagement team but who works in the firm's Durham audit. b. Adam, who is a tax partner and provided 50 hours of tax services to Hill Co during the year of the audit, is based out of the firm's Durham office. c. Ellie's grandmother holds an immaterial investment in Hill Corp stock in her portfolio. d. Julie, a partner in Dara \& Co, with an office in Charlotte, acted as a concurring review partner on the Hill Corp audit. e. None of the answers are correct. All are examples of covered members. QUESTION 10 CPA Carlos Santana is the auditor of Matchbox Twenty Corp (MTC). According to AICPA rules, independence will not be impaired on the MTC audit if: a. Santana opens a recording studio as a silent partner with the controller of MTC in a different city. b. Santana owns $5,000 of MTC stock. c. One of Santana's fellow partners, who does not work on the MTC audit, and is in a different office, has an immaterial direct financial interest in MTC. d. Santana's wife works in the accounting group at MTC. e. None of the responses are correct. QUESTION 11 Assume you are the auditor working on the Samsung year-end audit for 2022. Which of the following procedures would provide the least reliable evidence regarding the disclosure, completeness \& valuation of contingent liabilities that exist at the balance sheet date? a. Inclusion of a statement regarding the adequate disclosure of contingencies, litigation, etc, in the management representation letter which management signs. b. Inquiring of management as to the completeness of contingent liability disclosures and the existence of outstanding claims. c. Sending attorney letters to all attorneys with whom the client has worked in the prior year. d. Reviewing 2022 legal expense file. QUESTION 12 In determining whether or not to accept an audit engagement, when the CPA is not independent with respect to a client due to a financial relationship, the CPA must: a. Not accepting the audit engagement unless the financial relationship is eliminated. b. Provide a review report instead. c. Issue a disclaimer of opinion and include a separate paragraph in the audit report explaining the lack of independence. d. All of the responses are correct. QUESTION 13 Dara \& Co. audits Hill Corporation. Ellie, the engagement partner on the audit, works in the Raleigh office of the Firm. which of the following would not be considered a covered member who would comprise independence on the Hill Corporation audit? a. Jason, who is a member of the attest engagement team but who works in the firm's Durham audit. b. Adam, who is a tax partner and provided 50 hours of tax services to Hill Co during the year of the audit, is based out of the firm's Durham office. c. Ellie's grandmother holds an immaterial investment in Hill Corp stock in her portfolio. d. Julie, a partner in Dara \& Co, with an office in Charlotte, acted as a concurring review partner on the Hill Corp audit. e. None of the answers are correct. All are examples of covered members