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 in public practice receives a subpoena requesting client records. What is the first communication step the CPA should take?
Answer: Notify the client so they may seek legal counsel
When served with a subpoena, the CPA should promptly notify the client so the client can consult legal counsel and potentially seek to limit the scope of disclosure.
Under the AICPA Code of Professional Conduct, when may a CPA disclose confidential client information without the client's consent?
Answer: When required by a validly issued and enforceable subpoena or summons
The AICPA Code ET Section 1.700.001 permits disclosure without consent when compelled by a validly issued and enforceable legal process such as a subpoena.
A CPA reviewing a staff accountant's draft management letter comment finds it vague and unsupported. What is the appropriate supervisory response?
Answer: Return the draft with specific instructions for additional evidence and clearer language
Supervisory review requires providing constructive, specific guidance so staff can learn and produce documentation that meets professional standards.
Which element is NOT required in a compilation engagement communication under SSARS No. 21?
Answer: An expression of limited assurance on the financial statements
A compilation report does not provide any assurance — expressing limited assurance would make it a review, which requires different procedures.
When a CPA discovers a likely illegal act by a client during an audit, which communication sequence is most appropriate under AU-C Section 250?
Answer: Inform management or those charged with governance, then evaluate the effect on the audit
AU-C 250 requires the auditor to first communicate the illegal act to management at the appropriate level and those charged with governance, then assess its effect on the audit.
A CPA training partner emphasizes that audit documentation must be sufficient to enable an experienced auditor to understand the work performed. This standard is found in which pronouncement?
Answer: AU-C Section 230
AU-C Section 230 (Audit Documentation) establishes the 'experienced auditor' standard for evaluating the sufficiency of audit documentation.
In an academic or firm training context, what is the primary reason CPAs are taught to use plain language in client communications?
Answer: Plain language helps non-accountant clients understand findings and make informed decisions
Communicating clearly in plain language ensures clients can understand findings, recommendations, and risks, enabling them to make well-informed business decisions.