Professional Standards & Competencies Flashcards
7 cards from real Certified Public Accountant practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Professional Standards & Competencies flashcards as text
Under AICPA rules, a CPA who discovers a material error in a previously issued audit report must first:
Answer: Notify the client and advise them to disclose the error to affected parties
AU-C Section 560 requires the auditor to notify management and those charged with governance so appropriate disclosure is made to parties relying on the report.
Which GAAS standard requires the auditor to obtain sufficient appropriate audit evidence?
Answer: Fieldwork Standard — evidence
The fieldwork standard on evidence (AU-C Section 500) requires sufficient appropriate audit evidence to support the opinion.
A CPA firm's quality control policies under SQCS No. 8 must address all of the following EXCEPT:
Answer: Client fee negotiations
SQCS No. 8 covers leadership, ethics, acceptance/continuance, human resources, engagement performance, and monitoring — not fee negotiations.
The AICPA Code of Professional Conduct's 'objectivity' principle requires a CPA to:
Answer: Be free from conflicts of interest and avoid subordinating judgment to others
Objectivity prohibits conflicts of interest and requires CPAs to avoid subordinating their professional judgment to the interests of others.
When a CPA performs a compilation engagement under AR-C Section 80, the compilation report must include a statement that the CPA:
Answer: Expresses no assurance on the financial statements
A compilation report explicitly states that the CPA does not express an opinion or provide any assurance on the financial statements.
Under the Sarbanes-Oxley Act, which body has oversight authority over public company auditors?
Answer: Public Company Accounting Oversight Board (PCAOB)
SOX Section 101 created the PCAOB to oversee audits of public companies and set auditing standards for those engagements.
A CPA accepts a gift valued at $75 from an audit client. Under the AICPA Code, this most likely:
Answer: May be accepted if it is clearly inconsequential
The AICPA Code allows acceptance of gifts that are clearly inconsequential, but even small gifts can impair independence if not trivial in context.