Communication with Teachers & Parents Flashcards
7 cards from real AICPA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Communication with Teachers & Parents flashcards as text
A CPA mentor instructs a junior associate that 'independence in appearance' means which of the following?
Answer: A reasonable, informed third party would have no concerns about the CPA's objectivity
Independence in appearance means that a reasonable and informed third party, knowing all relevant facts, would not question the CPA's objectivity or integrity.
Which AICPA ethical principle requires CPAs to communicate only information they believe to be accurate and not misleading?
Answer: Integrity
The integrity principle requires CPAs to be honest and candid, ensuring all communications are accurate, complete, and not designed to mislead.
When a CPA communicates the results of agreed-upon procedures to a client, who is permitted to receive the resulting report?
Answer: Only the specified parties who agreed to the procedures
An agreed-upon procedures report is restricted to the specified parties identified in the engagement letter because others may misunderstand its purpose without context.
A supervisor returns a staff accountant's draft with the notation 'F/U needed' (follow-up needed). This notation most likely indicates which professional concern?
Answer: The staff accountant's conclusion lacks sufficient supporting evidence or requires additional corroboration
A follow-up notation typically means the supervisor identified a conclusion or procedure that lacks adequate evidence, requiring the staff member to obtain more support.
Under AICPA ethics rules, if a CPA learns during a tax engagement that a client omitted significant income in a prior filed return, what communication is most appropriate?
Answer: Inform the client of the error and recommend corrective action, but respect client confidentiality if client declines
AICPA guidance requires the CPA to notify the client of the error and recommend correction, but if the client refuses, the CPA must respect confidentiality and may choose to withdraw — not self-report to the IRS.
A CPA teaching continuing education explains that 'engagement quality control review' involves which type of communication?
Answer: An independent reviewer critiquing the engagement team's significant judgments before the report is released
An engagement quality control review (EQCR) involves an independent partner evaluating the significant judgments and conclusions of the engagement team before the report is issued.
When a CPA firm's training materials address 'subsequent events,' what communication timing requirement is emphasized?
Answer: Events occurring after the balance sheet date but before the report issuance date that require disclosure must be reflected or disclosed
AU-C Section 560 requires auditors to consider and communicate the impact of subsequent events — those occurring after the balance sheet date through the report date — that require adjustment or disclosure.