Question

1-An intangible loan from the CPA to an officer of a client affects the independence of the CPA.

True

False

2-The AICPA Professional Code of Conduct states that a CPA will not disclose any confidential information obtained in the course of a professional engagement, except with the consent of the client. This rule must be understood to prevent a CPA from responding to an investigation made by:

a-The jury of the AICPA.

b-A research body of a state company of CPA.

c-A CPA shareholder of the client's corporation.

d-A voluntary agency to review the quality of AICPA.

3-Although the quantity, type, and content of working papers will vary with the circumstances, the working papers generally would include the:

		a-Copies of those client records examined by the auditor during the course of the engagement.
		b-Evaluation of the efficiency and competence of the audit staff assistants by the partner responsible for the audit.
		c-Auditor's comments concerning the efficiency and competence of client management personnel.
		d-Auditing procedures followed and the testing performed in obtaining audit evidence.

Answer 1

1 .whether a loan given by CPA to it's client is tangible or intangible, the basic nature of the transaction shall be of loan only and thus it will impair the independence of CPA.

Thus, answer is True.

2. This rule should be understood to prevent to prevent CPA from disclosing client's confidential information to a CPA shareholder of the client's corporation such disclosure may be considered as providing unjust advantage to him. In rest of the cases, it is his professional duty to provide the information.

3. It is true that the quantity, type and content of working papers vary with the circumstances but working papers generally include audit procedures performed evidence obtained and conclusion reached

This, correct answer is (d) Auditing procedures followed and the testing performed in obtaining audit evidence.