Occurs when, by virtue of a close relationship with an assurance client, its directors, officers or employees, a firm or a member of the assurance team becomes too sympathetic to the client's interests. a. Self-interest threat b. Self-review threat c. Advocacy threat d. Familiarity threat

Occurs when, by virtue of a close
relationship with an assurance client, its
directors, officers or employees, a firm or a
member of the assurance team becomes
too sympathetic to the client's interests.
a. Self-interest threat
b. Self-review threat
c. Advocacy threat
d. Familiarity threat
by

1 Answer

Answer :

Familiarity threat
by

Related questions

Intimidation threat a. Is not a threat to independence. b. Occurs when a member of the assurance team may be deterred from acting objectively and exercising professional skepticism by threats, actual or perceived, from the directors, officers or employees of an assurance clienc. Occurs when, by virtue of a close relationship with an assurance client, its directors, officers or employees, a firm or a member of the assurance team becomes too sympathetic to the client's interests. d. Occurs when a firm, or a member of the assurance team, promotes, or may be perceived to promote, an assurance client's position or opinion to the point that objectivity may, or may be perceived to be, compromised.t

Description : Intimidation threat a. Is not a threat to independence. b. Occurs when a member of the assurance team may be deterred from acting objectively and exercising professional skepticism by threats, actual or ... or opinion to the point that objectivity may, or may be perceived to be, compromised.

Last Answer : Occurs when a member of the assurance team may be deterred from acting objectively and exercising professional skepticism by threats, actual or perceived, from the directors, officers or employees of an assurance client.

It occurs when a firm or a member of the assurance team could benefit from a financial interest in, or other self-interest conflict with, an assurance client. a. Self-interest threat b. Self-review threat c. Advocacy threat d. Familiarity threa

Description : It occurs when a firm or a member of the assurance team could benefit from a financial interest in, or other self-interest conflict with, an assurance client. a. Self-interest threat b. Self-review threat c. Advocacy threat d. Familiarity threa

Last Answer : Self-interest threat

A director, an officer or an employee of the assurance client in a position to exert direct and significant influence over the subject matter of the assurance engagement has been a member of the assurance team or partner of the firm. This situation least likely create a. Self-interest threat. b. Advocacy threat. c. Intimidation threat. d. Familiarity threat

Description : A director, an officer or an employee of the assurance client in a position to exert direct and significant influence over the subject matter of the assurance engagement has been a member of the ... create a. Self-interest threat. b. Advocacy threat. c. Intimidation threat. d. Familiarity threat

Last Answer : Advocacy threat.

Family and personal relationships between a member of the assurance team and a director, an officer or certain employees, depending on their role, of the assurance client, least likely create a. Self-review threat. b. Self-interest threat. c. Intimidation threat. d. Familiarity threat

Description : Family and personal relationships between a member of the assurance team and a director, an officer or certain employees, depending on their role, of the assurance client, least likely create a. Self-review threat. b. Self-interest threat. c. Intimidation threat. d. Familiarity threat

Last Answer : Self-review threat.

A former officer, director or employee of the assurance client serves as a member of the assurance team. This situation will least likely createa. Self-interest threat.b. Self-review threat.c. Intimidation threat.d. Familiarity threa

Description : A former officer, director or employee of the assurance client serves as a member of the assurance team. This situation will least likely create a. Self-interest threat. b. Self-review threat. c. Intimidation threat. d. Familiarity threa

Last Answer : Intimidation threat

A former officer, director or employee of the assurance client serves as a member of the assurance team. This situation will least likely create a. Self-interest threat. b. Self-review threat. c. Familiarity threat. d. Intimidation threat.

Description : A former officer, director or employee of the assurance client serves as a member of the assurance team. This situation will least likely create a. Self-interest threat. b. Self-review threat. c. Familiarity threat. d. Intimidation threat.

Last Answer : Intimidation threat.

The provision of services by a firm or network firm to an audit client that involve the design and implementation of financial information technology systems that are used to generate information forming part of a client's financial statements may most likely create a. Self-interest threat. b. Self-review threat. c. Intimidation threat. d. Familiarity threat

Description : The provision of services by a firm or network firm to an audit client that involve the design and implementation of financial information technology systems that are used to generate information forming ... Self-interest threat. b. Self-review threat. c. Intimidation threat. d. Familiarity threat

Last Answer : Self-review threat

A CPA-lawyer, acting as a legal counsel to one of his audit client, is an example of a. Self-interest threat b. Self-review threat c. Advocacy threat d. Familiarity threa

Description : A CPA-lawyer, acting as a legal counsel to one of his audit client, is an example of a. Self-interest threat b. Self-review threat c. Advocacy threat d. Familiarity threa

Last Answer : Advocacy threat

A CPA-lawyer, acting as a legal counsel to one of his audit client, is an example of a. Advocacy threat b. Familiarity threac. Self-interest threat d. Self-review threatt

Description : A CPA-lawyer, acting as a legal counsel to one of his audit client, is an example of a. Advocacy threat b. Familiarity threat c. Self-interest threat d. Self-review threat

Last Answer : Advocacy threa

Examples of circumstances that may create self-interest threat include: a. Contingent fees relating to assurance engagements. b. A direct financial interest or material indirect financial interest in an assurance client. c. A loan or guarantee to or from an assurance client or any of its directors or officers. d. All of the above

Description : Examples of circumstances that may create self-interest threat include: a. Contingent fees relating to assurance engagements. b. A direct financial interest or material indirect financial interest in an assurance ... an assurance client or any of its directors or officers. d. All of the above

Last Answer : All of the above

Examples of circumstances that may create self-interest threat include: a. Contingent fees relating to assurance engagements. b. A direct financial interest or material indirect financial interest in an assurance client. c. A loan or guarantee to or from an assurance client or any of its directors or officers. d. All of the above

Description : Examples of circumstances that may create self-interest threat include: a. Contingent fees relating to assurance engagements. b. A direct financial interest or material indirect financial interest in an assurance ... an assurance client or any of its directors or officers. d. All of the above

Last Answer : All of the above

Which of the following least likely create "self-interest threat"? a. Undue dependence on total fees from an assurance client. b. Concern about the possibility of losing the engagement. c. Having a close business relationship with an assurance client. d. Pressure to reduce inappropriately the extent of work performed in order to reduce fees

Description : Which of the following least likely create "self-interest threat"? a. Undue dependence on total fees from an assurance client. b. Concern about the possibility of losing the engagement. c. Having ... client. d. Pressure to reduce inappropriately the extent of work performed in order to reduce fees

Last Answer : Pressure to reduce inappropriately the extent of work performed in order to reduce fees

What is the most likely course of action that will be taken by an auditor in assessing management integrity? a. Tour the client premises. b. Research the prospective client’s related parties. c. Research the background and histories of officers d. Review the minutes of the board of directors

Description : What is the most likely course of action that will be taken by an auditor in assessing management integrity? a. Tour the client premises. b. Research the prospective client’s related parties. c. Research the background and histories of officers d. Review the minutes of the board of directors

Last Answer : Research the background and histories of officers

Which of the following is not likely a threat to independence? a. Acting as an advocate on behalf of an assurance client in litigation or in resolving disputes with third parties. b. Long association of a senior member of the assurance team with the assurance client. c. Threat of replacement over a disagreement with the application of an accounting principle. d. Owning immaterial indirect financial interest in an audit client.

Description : Which of the following is not likely a threat to independence? a. Acting as an advocate on behalf of an assurance client in litigation or in resolving disputes with third parties. b. ... the application of an accounting principle. d. Owning immaterial indirect financial interest in an audit client.

Last Answer : Owning immaterial indirect financial interest in an audit client.

Which of the following is not likely a threat to independence? a. Acting as an advocate on behalf of an assurance client in litigation or in resolving disputes with third parties. b. Long association of a senior member of the assurance team with the assurance client. c. Threat of replacement over a disagreement with the application of an accounting principle. d. Owning immaterial indirect financial interest in an audit client.

Description : Which of the following is not likely a threat to independence? a. Acting as an advocate on behalf of an assurance client in litigation or in resolving disputes with third parties. b. ... the application of an accounting principle. d. Owning immaterial indirect financial interest in an audit client.

Last Answer : Owning immaterial indirect financial interest in an audit client.

A CPA firm is considered independent when it performs which of the following services for a publicly traded audit client? a. Serving as a member of the client’s board of directors. b. Accounting information system design and implementation. c. Tax return preparation as approved by the board of directors. d. Determining which accounting policies will be adopted by the client

Description : A CPA firm is considered independent when it performs which of the following services for a publicly traded audit client? a. Serving as a member of the client's board of directors. b. ... approved by the board of directors. d. Determining which accounting policies will be adopted by the client

Last Answer : Tax return preparation as approved by the board of directors.

A CPA firm is considered independent when it performs which of the following services for a publicly traded audit client? a. Serving as a member of the client’s board of directors. b. Accounting information system design and implementation. c. Tax return preparation as approved by the board of directors. d. Determining which accounting policies will be adopted by the client

Description : A CPA firm is considered independent when it performs which of the following services for a publicly traded audit client? a. Serving as a member of the client's board of directors. b. ... approved by the board of directors. d. Determining which accounting policies will be adopted by the client

Last Answer : Tax return preparation as approved by the board of directors.

A CPA firm is considered independent when it performs which of the following services for a publicly-traded audit client? a. Serving as a member of the client's board of directors. b. Determining which accounting policies will be adopted by the client. c. Accounting information system design and implementation. d. Tax return preparation as approved by the board of directors.

Description : A CPA firm is considered independent when it performs which of the following services for a publicly-traded audit client? a. Serving as a member of the client's board of directors. b. ... information system design and implementation. d. Tax return preparation as approved by the board of directors.

Last Answer : Tax return preparation as approved by the board of directors.

The confidential relationship will be violated if, without client's permission, the CPA provides working papers about client to a. A court of law which subpoenas them. b. Another CPA firm as part of a peer review. c. Another CPA firm which has just purchased the CPA's entire practice. d. An investigative or disciplinary body which is conducting a review of the CPA's practice.

Description : The confidential relationship will be violated if, without client's permission, the CPA provides working papers about client to a. A court of law which subpoenas them. b. Another CPA firm as part ... . d. An investigative or disciplinary body which is conducting a review of the CPA's practice.

Last Answer : Another CPA firm which has just purchased the CPA's entire practice.

If a firm, or a network firm, has a direct financial interest in an audit client of the firm, the self-interest threat created would be so significant no safeguard could reduce the threat to an acceptable level. The action appropriate to permit the firm to perform the engagement would be to a. Dispose of the financial interest. b. Dispose of a sufficient amount of it so that the remaining interest is no longer material. c. Either a or b d. Neither a nor b

Description : If a firm, or a network firm, has a direct financial interest in an audit client of the firm, the self-interest threat created would be so significant no safeguard could reduce the threat to an acceptable ... that the remaining interest is no longer material. c. Either a or b d. Neither a nor b

Last Answer : Dispose of the financial interest

Which of the following partners is least likely to be considered a "covered member" for purposes of rendering assurance service to of Company A, a nonaudit client, performed by the head office of a national CPA firm? a. The partner in charge of the Davao office. b. The partner in charge of the entire CPA firm. c. A partner in the Cebu office of the CPA firm who maintains a small, immaterial investment in Company A. d. A partner in the Davao office who worked on the Company A for a different assurance engagement in previous years, but currently has no responsibilities with respect to the engagement

Description : Which of the following partners is least likely to be considered a "covered member" for purposes of rendering assurance service to of Company A, a nonaudit client, performed by the ... assurance engagement in previous years, but currently has no responsibilities with respect to the engagement

Last Answer : A partner in the Cebu office of the CPA firm who maintains a small, immaterial investment in Company A.

Which of the following partners is least likely to be considered a "covered member" for purposes of rendering assurance service to of Company A, a nonaudit client, performed by the head office of a national CPA firm? a. The partner in charge of the Davao office. b. The partner in charge of the entire CPA firm. c. A partner in the Cebu office of the CPA firm who maintains a small, immaterial investment in Company A. d. A partner in the Davao office who worked on the Company A for a different assurance engagement in previous years, but currently has no responsibilities with respect to the engagement

Description : Which of the following partners is least likely to be considered a "covered member" for purposes of rendering assurance service to of Company A, a nonaudit client, performed by the ... assurance engagement in previous years, but currently has no responsibilities with respect to the engagement

Last Answer : A partner in the Cebu office of the CPA firm who maintains a small, immaterial investment in Company A.

A member in public practice may perform for a contingent fee any professional services for a client for whom the member or member's firm performs a. An audit. b. A review. c. A compilation used only by management. d. An audit of prospective financial information

Description : A member in public practice may perform for a contingent fee any professional services for a client for whom the member or member's firm performs a. An audit. b. A review. c. A compilation used only by management. d. An audit of prospective financial information

Last Answer : A compilation used only by management.

A member in public practice may perform for a contingent fee any professional services for a client for whom the member or member's firm performs a. An auditb. A review. c. A compilation used only by management. d. An audit of prospective financial information..

Description : A member in public practice may perform for a contingent fee any professional services for a client for whom the member or member's firm performs a. An audit. b. A review. c. A compilation used only by management. d. An audit of prospective financial information.

Last Answer : A compilation used only by management.

Identify the correct statement. a. Accounting services do not provide attestation. b. Management consulting services provide attestation in all cases. c. An audit provides limited assurance by attesting to the fairness of the client's assertions. d. A review provides positive assurance by attesting the reliability of the client's assertions

Description : Identify the correct statement. a. Accounting services do not provide attestation. b. Management consulting services provide attestation in all cases. c. An audit provides limited assurance by ... d. A review provides positive assurance by attesting the reliability of the client's assertions

Last Answer : Accounting services do not provide attestation

Which of the following services provides a moderate level of assurance about the client's financial statements? a. Forecasts and projections b. Compliance with contractual agreement c. Review d. Compilation

Description : Which of the following services provides a moderate level of assurance about the client's financial statements? a. Forecasts and projections b. Compliance with contractual agreement c. Review d. Compilation

Last Answer : Review

To emphasize auditor independence from management, many corporations follow the practice of a. Appointing a partner of the CPA firm conducting the examination to the corporation's audit committee. b. Establishing a policy of discouraging social contact between employees of the corporation and the staff of the independent auditor. c. Requesting that a representative of the independent auditor be on hand at the annual stockholders' meeting. d. Having the independent auditor report to an audit committee of outside members of the board of directors

Description : To emphasize auditor independence from management, many corporations follow the practice of a. Appointing a partner of the CPA firm conducting the examination to the corporation's audit committee. b ... the independent auditor report to an audit committee of outside members of the board of directors

Last Answer : Having the independent auditor report to an audit committee of outside members of the board of directors

The network firms are required to be independent of the client a. For assurance engagements provided to an audit client. b. For assurance engagements provided to clients that are not audit clients, when the report is not expressly restricted for use by identified users. c. For assurance engagements provided to clients that are not audit clients, when the assurance report is expressly restricted for use by identified users. d. All of the above

Description : The network firms are required to be independent of the client a. For assurance engagements provided to an audit client. b. For assurance engagements provided to clients that are not audit clients, ... the assurance report is expressly restricted for use by identified users. d. All of the above

Last Answer : For assurance engagements provided to an audit client

The network firms are required to be independent of the client a. For assurance engagements provided to an audit client. b. For assurance engagements provided to clients that are not audit clients, when the report is not expressly restricted for use by identified users. c. For assurance engagements provided to clients that are not audit clients, when the assurance report is expressly restricted for use by identified users. d. All of the above

Description : The network firms are required to be independent of the client a. For assurance engagements provided to an audit client. b. For assurance engagements provided to clients that are not audit clients, ... the assurance report is expressly restricted for use by identified users. d. All of the above

Last Answer : For assurance engagements provided to an audit client

The network firms are required to be independent of the client a. For assurance engagements provided to an audit client. b. For assurance engagements provided to clients that are not audit clients, when the report is not expressly restricted for use by identified users. c. For assurance engagements provided to clients that are not audit clients, whenthe assurance report is expresslyrestricted for use by identified users.d. All of the above

Description : The network firms are required to be independent of the client a. For assurance engagements provided to an audit client. b. For assurance engagements provided to clients that are not audit clients, ... whenthe assurance report is expressly restricted for use by identified users. d. All of the above

Last Answer : For assurance engagements provided to an audit client.

In which circumstance is a CPA firm's independence most likely to be impaired? a. An individual on the audit has a close relative who is a receptionist for the client. b. The father of the audit senior holds a material financial interest in the client of which the senior is unaware. c. The spouse of a staff member on the audit has an immaterial common stock investment in the audit client. d. The partner in charge of the office's compensation is affected by office profitability, a portion of which arises from this audit

Description : In which circumstance is a CPA firm's independence most likely to be impaired? a. An individual on the audit has a close relative who is a receptionist for the client. b. The father of ... of the office's compensation is affected by office profitability, a portion of which arises from this audit

Last Answer : The spouse of a staff member on the audit has an immaterial common stock investment in the audit client

In which circumstance is a CPA firm's independence most likely to be impaired? a. An individual on the audit has a close relative who is a receptionist for the client. b. The father of the audit senior holds a material financial interest in the client of which the senior is unaware. c. The spouse of a staff member on the audit has an immaterial common stock investment in the audit client. d. The partner in charge of the office's compensation is affected by office profitability, a portion of which arises from this audit.

Description : In which circumstance is a CPA firm's independence most likely to be impaired? a. An individual on the audit has a close relative who is a receptionist for the client. b. The father of ... of the office's compensation is affected by office profitability, a portion of which arises from this audit.

Last Answer : The spouse of a staff member on the audit has an immaterial common stock investment in the audit client.

A time budget is an estimate of the total hours an audit is expected to take. The following are among the factors to be considered in developing this budget, except a. Client's size as indicated by its gross assets, sales, number of employees. b. Location of client facilities. c. The competence and experience of available staff. d. Whether the audit is performed during the interim or at year-end.

Description : A time budget is an estimate of the total hours an audit is expected to take. The following are among the factors to be considered in developing this budget, except a. Client's size as indicated ... experience of available staff. d. Whether the audit is performed during the interim or at year-end.

Last Answer : Whether the audit is performed during the interim or at year-end.

In pursuing a CPA firm's quality control objectives, a CPA firm may maintain records indicating which partners or employees of the CPA firm were previously employed by the CPA firm's clients. Which quality control element would this be most likely to satisfy? a. Monitoring. b. Human resources. c. Ethical requirements. d. Engagement performance

Description : In pursuing a CPA firm's quality control objectives, a CPA firm may maintain records indicating which partners or employees of the CPA firm were previously employed by the CPA firm's clients. Which ... to satisfy? a. Monitoring. b. Human resources. c. Ethical requirements. d. Engagement performance

Last Answer : Ethical requirements.

Which of the following is the most likely first step an auditor would perform at the beginning of an initial audit engagement? a. Prepare a rough draft of the financial statements and of the auditor's report. b. Study and evaluate the system of internal administrative control. c. Tour the client's facilities and review the general records. d. Consult with and review the work of the predecessor auditor prior to discussing the engagement with the client management

Description : Which of the following is the most likely first step an auditor would perform at the beginning of an initial audit engagement? a. Prepare a rough draft of the financial statements and of ... and review the work of the predecessor auditor prior to discussing the engagement with the client management

Last Answer : Tour the client's facilities and review the general records

Which of the following is the most likely first step an auditor would perform at the beginning of an initial audit engagement? a. Prepare a rough draft of the financial statements and of the auditor's report. b. Study and evaluate the system of internal administrative control. c. Tour the client's facilities and review the general records. d. Consult with and review the work of the predecessor auditor prior to discussing the engagement with the client management

Description : Which of the following is the most likely first step an auditor would perform at the beginning of an initial audit engagement? a. Prepare a rough draft of the financial statements and of ... and review the work of the predecessor auditor prior to discussing the engagement with the client management

Last Answer : Tour the client's facilities and review the general records

Which of the following is the most likely first step an auditor would perform at the beginning of an initial audit engagement? a. Prepare a rough draft of the financial statements and of the auditor's report. b. Study and evaluate the system of internal administrative control. c. Tour the client's facilities and review the general records. d. Consult with and review the work of the predecessor auditor prior to discussing the engagement with the client management

Description : Which of the following is the most likely first step an auditor would perform at the beginning of an initial audit engagement? a. Prepare a rough draft of the financial statements and of ... and review the work of the predecessor auditor prior to discussing the engagement with the client management

Last Answer : Tour the client's facilities and review the general records

What will an auditor who has been proposed for an audit engagement usually do prior to accepting a new client? a. Draft the financial statements of the client as a measure of goodwilb. With the permission from the prospective client, contact the predecessor auditor to determine if there are any disagreements between the client and the audit firms. c. Obtain the potential client's permission to talk to the former auditor and review work papers. d. Perform a peer review on the potential client in accordance with professional standardsl

Description : What will an auditor who has been proposed for an audit engagement usually do prior to accepting a new client? a. Draft the financial statements of the client as a measure of goodwill b ... review work papers. d. Perform a peer review on the potential client in accordance with professional standards

Last Answer : With the permission from the prospective client, contact the predecessor auditor to determine if there are any disagreements between the client and the audit firms

A CPA in public practice shall not disclose any confidential client information without the specific consent of the client. The confidentiality rule is violated if CPA disclosed information without client's consent as a result of a a. Subpoena or summons. b. Peer review. c. Request by client's largest stockholder. d. Complaint filed with the trial board of the Board of Accountancy

Description : A CPA in public practice shall not disclose any confidential client information without the specific consent of the client. The confidentiality rule is violated if CPA disclosed information without client' ... s largest stockholder. d. Complaint filed with the trial board of the Board of Accountancy

Last Answer : Request by client's largest stockholder.

To obtain an understanding of a continuing client’s business in planning an audit, an auditor most likely would a. Read specialized industry journals. b. Review prior year working papers and the permanent file for the client. c. Reevaluate the client’s internal control environment. d. Perform tests of details of transactions and balances

Description : To obtain an understanding of a continuing client's business in planning an audit, an auditor most likely would a. Read specialized industry journals. b. Review prior year working papers and ... the client's internal control environment. d. Perform tests of details of transactions and balances

Last Answer : Review prior year working papers and the permanent file for the client

When an auditor believes that an understanding with the client has not been established, he or she should ordinarily a. Perform the audit with increased professional skepticism. b. Decline to accept or perform the audit. c. Review the client’s financial reports. d. Obtain information about the client’s business and the industry where it operates

Description : When an auditor believes that an understanding with the client has not been established, he or she should ordinarily a. Perform the audit with increased professional skepticism. b. Decline to accept ... reports. d. Obtain information about the client's business and the industry where it operates

Last Answer : Decline to accept or perform the audit.

A process comprising an ongoing consideration and evaluation of the firm's system of quality control, including a periodic inspection of a selection of completed engagements, designed to enable the firm to obtain reasonable assurance that its system of quality control is operating effectively. a. Inspection b. Monitoring c. Peer review d. Engagement quality control review

Description : A process comprising an ongoing consideration and evaluation of the firm's system of quality control, including a periodic inspection of a selection of completed engagements, designed to enable the firm ... effectively. a. Inspection b. Monitoring c. Peer review d. Engagement quality control review

Last Answer : Monitoring

An engagement in which a CPA firm arranges for a critical review of its practices by another CPA firm. a. Attestation engagement b. Peer review engagement c. Quality control engagement d. Quality assurance engagemen

Description : An engagement in which a CPA firm arranges for a critical review of its practices by another CPA firm. a. Attestation engagement b. Peer review engagement c. Quality control engagement d. Quality assurance engagemen

Last Answer : Peer review engagement

A CPA should not submit unaudited financial statements of a non-public entity to a client or others unless, as a minimum, the CPA complies with the provisions applicable to a. Audit engagements. b. Review engagements. c. Assurance engagements. d. Compilation engagements.

Description : A CPA should not submit unaudited financial statements of a non-public entity to a client or others unless, as a minimum, the CPA complies with the provisions applicable to a. Audit engagements. b. Review engagements. c. Assurance engagements. d. Compilation engagements.

Last Answer : Compilation engagements.