Certified Public Accountant Regulatory Frameworks & Compliance 2

Question 1

Under the Dodd-Frank Act, which entity has primary authority to regulate systemically important financial institutions (SIFIs)?

Accepted Answer

Financial Stability Oversight Council (FSOC)

Answer

The Financial Stability Oversight Council (FSOC), created by Dodd-Frank, designates and oversees systemically important financial institutions.

Question 2

A CPA discovers that a client's financial statements contain a material misstatement that the client refuses to correct. Under AICPA ethics rules, what is the CPA's appropriate action regarding an audit engagement?

Accepted Answer

Issue a qualified or adverse opinion, or withdraw from the engagement

Answer

When a client refuses to correct a material misstatement, the auditor must modify their opinion (qualified or adverse) or withdraw from the engagement.

Question 3

Which SEC regulation requires companies to disclose information about off-balance-sheet arrangements and contractual obligations in their annual reports?

Accepted Answer

Regulation S-K Item 303 (MD&A)

Answer

Regulation S-K Item 303 (Management's Discussion and Analysis) requires disclosure of off-balance-sheet arrangements and contractual obligations.

Question 4

Under the Bank Secrecy Act (BSA), what is the threshold for filing a Currency Transaction Report (CTR)?

Accepted Answer

$10,000

Answer

Financial institutions must file a CTR for cash transactions exceeding $10,000 in a single business day.

Question 5

The PCAOB's AS 2201 standard primarily governs which aspect of an audit engagement?

Accepted Answer

Auditing internal control over financial reporting

Answer

AS 2201 (formerly AS 5) establishes requirements for auditing internal control over financial reporting integrated with the audit of financial statements.

Certified Public Accountant Practice Test

Certified Public Accountant Practice Test

Certified Public Accountant Regulatory Frameworks & Compliance 2