CGA CGA Ethics & Professional Standards 3

Question 1

Which of the following best describes the concept of 'due professional care' in an audit?

Accepted Answer

Exercising the skill and diligence that a competent professional would apply

Answer

Guaranteeing complete accuracy of all financial statements

Answer

Completing the engagement within a fixed budget

Answer

Verifying 100% of all transactions

Question 2

When a CGA member faces pressure from a supervisor to sign off on misleading financial statements, the appropriate first action is to:

Accepted Answer

Refuse and document objections, escalating internally if needed

Answer

Sign off to avoid conflict and report later

Answer

Immediately resign and report to regulators

Answer

Consult the client's legal counsel

Question 3

Which of the following is an acceptable safeguard against a familiarity threat in an audit?

Accepted Answer

Rotating the lead audit partner after a set number of years

Answer

Reducing the scope of audit procedures

Answer

Having the auditor perform additional non-audit services

Answer

Allowing the client to select audit team members

Question 4

A contingent fee arrangement for a CGA providing tax services is generally:

Accepted Answer

Prohibited because it threatens objectivity and independence

Answer

Always acceptable if the client agrees in writing

Answer

Acceptable for compilation engagements only

Answer

Required under AICPA standards for efficiency

Question 5

The AICPA's conceptual framework for independence requires consideration of which two components?

Accepted Answer

Independence in fact and independence in appearance

Answer

Technical independence and legal independence

Answer

Financial independence and personal independence

Answer

Regulatory independence and economic independence

Question 6

Referring a client to a third-party service provider and receiving a referral fee without disclosing it to the client violates which principle?

Accepted Answer

Integrity and objectivity

Answer

Professional competence

Answer

Confidentiality

Answer

Professional behavior only