Practice Test Geeks(CA) Chartered Certified Accountant Practice Test
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Regulatory Compliance & Ethics Flashcards

7 cards from real CA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Regulatory Compliance & Ethics flashcards as text

  1. The Foreign Corrupt Practices Act (FCPA) prohibits U.S. companies and persons from doing which of the following?

    Answer: Bribing foreign government officials to obtain or retain business

    The FCPA prohibits U.S. entities and individuals from paying bribes to foreign officials to gain or maintain business advantages.

  2. Which of the following is considered a 'safeguard created by the profession' under the AICPA conceptual framework?

    Answer: Mandatory peer review programs

    Mandatory peer review programs are profession-level safeguards established by professional bodies to reduce threats to compliance with ethical principles.

  3. Under the Dodd-Frank Act, which of the following whistleblower protections applies to employees who report securities violations?

    Answer: Protection from employer retaliation and potential financial awards

    Dodd-Frank protects whistleblowers from employer retaliation and provides financial awards of 10-30% of sanctions over $1 million for valid tips.

  4. An auditor's independence would be considered impaired if they own which of the following interests in an audit client?

    Answer: Any direct financial interest in the client

    Any direct financial interest in an audit client impairs independence, regardless of the amount, under both AICPA and SEC rules.

  5. Which type of audit opinion is issued when financial statements contain a material misstatement that is pervasive?

    Answer: Adverse opinion

    An adverse opinion is issued when misstatements are both material and pervasive, indicating the statements do not fairly present financial position.

  6. Under the Bank Secrecy Act, financial institutions must file a Currency Transaction Report (CTR) for cash transactions exceeding what amount?

    Answer: $10,000

    The BSA requires CTR filing for currency transactions exceeding $10,000 in a single business day.

  7. A CPA working in industry discovers their employer has committed an illegal act. After internal escalation fails, what should the CPA do next according to professional standards?

    Answer: Consult legal counsel and consider further reporting obligations

    After failed internal escalation, the CPA should seek legal counsel to understand their reporting obligations and potential whistleblower protections before taking further action.