Question 30 (1 point) An independent professional accountant certifies financial statements that contains material misstatements that violate revenue recognition standards. Which of the following fundamental principles of ethics did the accountant possibly violate? Honesty Professional skepticism Professional competence and due care Respect Question 31 (1 point) Which is not an example of a threat that is set out in the IESBA Code of Ethics? O Self-review threat Self-interest threat Familiarity threat Management participation threat Intimidation threat Advocacy threat Question 32 (1 point) Audrey Smith , an independent external auditor, works closely with the CFO of a company to collect evidence on the performance of a senior accountant in the company. Audrey Smith, then writes a letter to the Board signed by her as external auditor and the CFO to recommend that the employee should be dismissed. Which of the following is a correct statement? The independence of the auditor is threatened because Audrey Smith acts as management and not in a manner that is consistent with the duties and responsibilities of an auditor The independence of the auditor is not threatened because Audrey Smith as auditor is responsible for evaluating the performance of senior personnel in the organization and making recommendations to the Board. The independence of the auditor is not threatened because the CFO signed the letter. The independence of the auditor is not threatened because the Board will take the necessary action and not the auditor. Question 33 (1 point) Which of the statements about independence is false? The threats to the fundamental principles of ethics and threats to independence are generally indistinguishable. Professional accountants in public practice are required to be independent when performing audits, reviews and other assurance engagements. Independence is a fundamental principle of ethics that all professional accountants are required to comply with. Independence is linked to the fundamental principles of objectivity and integrity. Independence comprises of independence in minde and independence in appearance. Question 35 (1 point) Which statement best describes the requirement relating to confidentiality under the IESBA Code? Professional accountants shall not disclose client information to third parties or to the public. Professional accountants are no longer required to maintain confidentiality for former clients. Confidentiality serves the public interest because it facilitates the free flow of information from the professional accountantos client or employing organization. Confidentiality is required to reduce the risk of accounting firms subsequently getting sued by their audit clients and others. John Henry is a Certified Public Accountant who works in a firm of external auditors. John audits the financial statements of mainly automobile dealers. John has purchased his cars from the same dealer, XYZ Cars, for 20 years. Because John compiles the financial statements for XYZ cars each year, the management offers him a discount of 20% below the average selling price of the automobile and zero percent financing every time he purchases a car. Recently, XYZOS banks requested audited financial statements from the dealership instead of statements that were compiled by a CPA. John has agreed to provide the company with audited financial statements because management complies with sound ethical standards and all applicable laws, and he is very familiar with XYZOS operations. Which of the following statements is correct regarding this scenario? By accepting the audit, John will compromise the Integrity principle of ethics for accountants. By accepting the audit, John is likely to compromise his independence and might violate the objectivity principle of ethics for accountants. By accepting the audit, John is demonstrating that he is competent and principled, and will behave in a manner that is consistent with the behavior of most independent auditors. By accepting the audit, John demonstrates that he is a person of strong moral character and will not violate any ethical principles because he is helping a business with a long history of compliance with sound ethical principles and applicable laws
