FAC FAC Ethics, Compliance & Professional Standards 2

Question 1

The Foreign Corrupt Practices Act (FCPA) primarily prohibits U.S. companies from:

Accepted Answer

Paying bribes to foreign government officials to obtain or retain business

Answer

The FCPA prohibits U.S. persons and companies from bribing foreign government officials to gain business advantages and requires accurate books and records.

Question 2

Which regulatory body, established by the Sarbanes-Oxley Act, oversees auditing standards for public company auditors in the United States?

Accepted Answer

PCAOB

Answer

The Public Company Accounting Oversight Board (PCAOB) was created by SOX to oversee audits of public companies and protect investors.

Question 3

What does 'due professional care' require of an accounting professional?

Accepted Answer

Applying the diligence and critical thinking a competent professional would exercise

Answer

Due professional care means applying the skill and diligence that a competent, reasonable professional would exercise under similar circumstances.

Question 4

Which of the following would be considered a conflict of interest for an external auditor?

Accepted Answer

Owning stock in the company being audited

Answer

Owning stock in an audit client creates a financial conflict of interest that impairs independence and violates professional ethics rules.

Question 5

Under SEC rules, U.S. domestic public companies must prepare their financial statements in accordance with:

Accepted Answer

Generally Accepted Accounting Principles (U.S. GAAP)

Answer

The SEC requires U.S. domestic public companies to file financial statements prepared under U.S. GAAP, though foreign private issuers may use IFRS.

(FAC) Finance and Accounting Certification Practice Test

(FAC) Finance and Accounting Certification Practice Test

FAC FAC Ethics, Compliance & Professional Standards 2