AICPA Ethics, Governance & Business Law 2

Question 1

Under the AICPA Code of Professional Conduct, which threat to independence arises when a CPA has a close personal relationship with a client's management?

Accepted Answer

Familiarity threat

Answer

A familiarity threat occurs when a CPA becomes too sympathetic to a client's interests due to a close personal or long-standing relationship.

Question 2

Under the Sarbanes-Oxley Act, who is directly responsible for establishing and maintaining internal controls over financial reporting?

Accepted Answer

Company management (CEO and CFO)

Answer

SOX Section 302 and 404 place direct responsibility on the CEO and CFO to certify and maintain adequate internal controls over financial reporting.

Question 3

A CPA firm that performs bookkeeping services for an audit client and then audits those same records faces which primary independence threat?

Accepted Answer

Self-review threat

Answer

A self-review threat occurs when a CPA audits records or systems they or their firm previously prepared.

Question 4

Under the UCC Article 2, when does title to goods pass from seller to buyer in the absence of a specific agreement?

Accepted Answer

When the seller completes delivery obligations

Answer

Under UCC Article 2, title passes to the buyer at the time and place the seller completes performance of delivery obligations.

Question 5

Which corporate governance principle requires that board members act in the best interest of shareholders rather than personal gain?

Accepted Answer

Duty of loyalty

Answer

The duty of loyalty requires directors and officers to prioritize corporate and shareholder interests over their own personal financial interests.

(AICPA) Association of International Certified Professional Accountants Practice Test

(AICPA) Association of International Certified Professional Accountants Practice Test

AICPA Ethics, Governance & Business Law 2