Question

1.Which of the following would be considered a violation of the professional code of conduct related to independence?

a) you review an attest client's internal controls

b) you terminated the controlled of an asset client's company

c) you were an employee of an attest client's company 20 years ago

d) your classmate in college is a director of an attest client's company

2 .Which of the following would be considered a violation of the professional code of conduct related to competence?

a) you hire a student that just passed the CPA exam but discover the student made several mistakes during the audit

b) you hire a student to audit a new client and the student is constantly researching and consulting with others

c) you hire two new auditors and evaluate their ability to exercise sound judgment during an audit

d) you hired a student in his senior year to perform a complete audit of a new client

3. If an auditor discovers material misstatements after the audit report is issued, the auditor's first step should be to notify:

a) appropriate regulatory agencies

b) the audit firm's legal council

c) the audit committee of the client

d) the client

Answer 1

ANS:

1.Which of the following would be considered a violation of the professional code of conduct related to independence?

a) you review an attest client's internal controls.

2 .Which of the following would be considered a violation of the professional code of conduct related to competence?

b) you hire a student to audit a new client and the student is constantly researching and consulting with others

3. If an auditor discovers material misstatements after the audit report is issued, the auditor's first step should be to notify:

d) the client