CA Regulatory Compliance & Ethics 3

Question 1

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

Accepted Answer

Bribing foreign government officials to obtain or retain business

Answer

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

Question 2

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

Accepted Answer

Mandatory peer review programs

Answer

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

Question 3

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

Accepted Answer

Protection from employer retaliation and potential financial awards

Answer

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

Question 4

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

Accepted Answer

Any direct financial interest in the client

Answer

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

Question 5

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

Accepted Answer

Adverse opinion

Answer

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

(CA) Chartered Certified Accountant Practice Test

(CA) Chartered Certified Accountant Practice Test

CA Regulatory Compliance & Ethics 3