AICPA Communication with Teachers & Parents 3

Question 1

A CPA in public practice receives a subpoena requesting client records. What is the first communication step the CPA should take?

Accepted Answer

Notify the client so they may seek legal counsel

Answer

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.

Question 2

Under the AICPA Code of Professional Conduct, when may a CPA disclose confidential client information without the client's consent?

Accepted Answer

When required by a validly issued and enforceable subpoena or summons

Answer

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.

Question 3

A CPA reviewing a staff accountant's draft management letter comment finds it vague and unsupported. What is the appropriate supervisory response?

Accepted Answer

Return the draft with specific instructions for additional evidence and clearer language

Answer

Supervisory review requires providing constructive, specific guidance so staff can learn and produce documentation that meets professional standards.

Question 4

Which element is NOT required in a compilation engagement communication under SSARS No. 21?

Accepted Answer

An expression of limited assurance on the financial statements

Answer

A compilation report does not provide any assurance — expressing limited assurance would make it a review, which requires different procedures.

Question 5

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?

Accepted Answer

Inform management or those charged with governance, then evaluate the effect on the audit

Answer

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.

(AICPA) Association of International Certified Professional Accountants Practice Test

(AICPA) Association of International Certified Professional Accountants Practice Test

AICPA Communication with Teachers & Parents 3