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

Due professional care means applying the same judgment, diligence, and competence that a reasonably skilled professional would bring to the engagement.

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

The professional standards require documenting objections, refusing to sign off on misleading statements, and escalating through internal channels before external reporting.

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

Partner rotation is a key safeguard against familiarity threats, ensuring that auditors don't become too comfortable with client management over time.

Question 4

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

Accepted Answer

Prohibited because it threatens objectivity and independence

Answer

Contingent fees create a self-interest threat that impairs objectivity, and are generally prohibited for tax and assurance services under professional standards.

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

Independence requires both independence in fact (actual freedom from bias) and independence in appearance (looking unbiased to a reasonable observer).

(CGA) Certified General Accountant Practice Test

(CGA) Certified General Accountant Practice Test

CGA CGA Ethics & Professional Standards 3