Certified Public Accountant Regulatory Frameworks & Compliance 3

Question 1

Under Circular 230, which of the following best describes a 'covered opinion'?

Accepted Answer

Written advice concerning a listed transaction or a principal purpose transaction

Answer

A covered opinion under Circular 230 includes written advice on listed transactions or transactions with tax avoidance as a principal purpose.

Question 2

Which federal agency enforces the Employee Retirement Income Security Act (ERISA) for private pension plans?

Accepted Answer

Department of Labor and IRS (jointly)

Answer

ERISA enforcement is shared primarily between the Department of Labor (plan administration) and the IRS (tax qualification), with the PBGC covering plan termination insurance.

Question 3

Under the Foreign Corrupt Practices Act (FCPA), which of the following is NOT considered a foreign official for purposes of the anti-bribery provisions?

Accepted Answer

A private sector business competitor in a foreign country

Answer

The FCPA's anti-bribery provisions apply to foreign officials, government employees, and political party officials, but not to private sector individuals.

Question 4

Which GAAS standard requires auditors to obtain an understanding of the entity and its environment, including its internal control?

Accepted Answer

AU-C Section 315

Answer

AU-C Section 315 requires the auditor to identify and assess risks of material misstatement through understanding the entity and its environment.

Question 5

A CPA firm that audits an SEC registrant must rotate the lead audit engagement partner every:

Accepted Answer

5 years

Answer

Under Sarbanes-Oxley and SEC rules, the lead audit partner must rotate off an engagement after five consecutive years of service.

Certified Public Accountant Practice Test

Certified Public Accountant Practice Test

Certified Public Accountant Regulatory Frameworks & Compliance 3