Question 10

You serve on the board of a not-for-profit entity that is not an audit or assurance client. At the latest meeting, the board is discussing a number of financial matters. Which of the following discussions and decisions must you recuse yourself from?

Expanding its investment portfolio

Hosting a fundraising ball

Refinancing a loan

Question 11

A dependent is any individual who received more than half of his or her support for the most recent calendar year from the relevant individual (i.e. the KPMG member firm professional, his or her spouse (or equivalent), or both). A dependent may be an unrelated person.

Is this statement true or false?

True

False

Question 12

You are a staff member of the audit engagement team for Company X. You saw an update on your best friend's social media that he has just been hired by Company X. You call him to congratulate him and find out that he will be an analyst in the finance department. You immediately inform the Lead Audit Engagement Partner and the Ethics and Independence Partner about the situation to avoid any threat to independence.

Considering the independence policies, was this action correct?

No

Yes

Question 6

Your friend has informed you that a new cryptocurrency is launching next week. You want to invest early in this new product, what do you need to do before making the purchase?

Consult with your performance manager

KPMG does not allow the purchase of cryptocurrencies

Cryptocurrencies are not subject to independence rules, so you may proceed without pre-approval

Consult with your Ethics and Independence Partner

Question 7

Your child needs a loan to pay for university; you offer to co-sign the loan for them to help them secure the finances. Because you are co-signing the loan and not taking it out directly in your name, it doesn't matter where you get the loan from.

Is this statement true or false?

True

False

\\Question 8

If you and your spouse keep all accounts separate even after you get married, you do not need to check their financial relationships because you are both financially independent. Thus, you only need to monitor your relationships to avoid an independence issue.

Is this statement true or false?

True

False

Question 9

You are not required to monitor the investments held through your spouse's employee benefit plan if those investments are managed and chosen by an intermediary (e.g. the plan administrator).

Is this statement true or false?

True

False

Question 10

Under what circumstances may a covered person hold an insurance policy with an IESBA restricted audit client?

Only if the insurance policy was issued prior to them becoming a covered person

There are no restrictions on covered persons holding insurance policies with IESBA restricted audit clients

Under no circumstances

Only if the individual does not make changes to the terms of the contract

Question 11

Company ABC is a KPMG audit client. The audit is conducted out of the Big City office, which is where the Lead Audit Engagement Partner is located. Which of the following individuals in the Big City office are considered "covered persons" with respect to Company ABC?

An advisory senior associate who does not provide services to Company ABC

A tax partner who only works on tax engagements

An audit managing director (partner-equivalent) who does not provide services to Company ABC

An audit associate who does not provide services to Company ABC

Question 12

You serve on the board of a not-for-profit entity that is not an audit or assurance client. At the latest meeting, the board is discussing a number of financial matters. Which of the following discussions and decisions must you recuse yourself from?

Hosting a fundraising ball

Refinancing a loan

Expanding its investment portfolio

Question 7

Under which circumstances is it okay for a covered person to take out a student loan with an SEC restricted entity?

Only if you co-sign the loan and do not take out the loan in your sole name

Under no circumstances

Only if you do not serve on the audit engagement

The loan is obtained under normal lending procedures, terms and requirements

Question 8

You have just been assigned to work on the audit engagement for Company A. You know that your friend works for Company A as a Senior Accountant. What should you do to avoid jeopardizing the firm's independence in appearance?

Inform the Lead Audit Engagement Partner and/or the Ethics and Independence Partner of the relationship immediately

Ask your friend not to tell anyone at Company A about your friendship and don't speak to your friend while at work

Since your friend is not the CFO you do not need to be concerned about any potential independence impact

Inform your friend's company of the relationship and let them work with KPMG to resolve any possible conflicts