Question 1 The International Ethics Standards Board for Accountants has three parts. What are these?
Options:
A)
Part A - General Application of the Code
Part B - Professional Accountants in Tax Practice
Part C - Professional Accountants in Business
B)
Part A - General Application of the Code
Part B - Professional Accountants in Public Practice
Part C - Professional Accountants in Private Practice
C)
Part A - Professional Accountants in Private Practice
Part B - Professional Accountants in Public Practice
Part C - Professional Accountants in Business
D)
Part A - General Application of the Code
Part B - Professional Accountants in Public Practice
Part C - Professional Accountants in Business
Question 2- Valeant Pharmaceuticals engaged in channel stuffing.
Options
A) True
B) False
Question 3- How can one manipulate a financial statement?
Options:
A)
recognition of asset disposals or investment gains as either reductions in operating expenses or increases in operating revenues
recognition of current operating expenses as being deferred to some future period
failure to recognize or the inappropriate reduction of liabilities in the current year
recognition of current revenues
B)
recognition of current operating expenses as being applicable to some prior period or being deferred to some future period
failure to recognize or the inappropriate reduction of liabilities in the current year
recognition of current revenues as being deferred to some future period
recognition of current expenses as current operating expenses
C)
recognition of revenues
recognition of asset disposals or investment gains as either reductions in operating expenses or increases in operating revenues
recognition of current operating expenses as being applicable to some prior period or being deferred to some future period
failure to recognize or the inappropriate reduction of liabilities in the current year
D)
recognition of revenues earlier than they should be recognized
recognition of questionable revenues
recognition of false revenues
recognition of asset disposals or investment gains as either reductions in operating expenses or increases in operating revenues
Question 4- There are typically our rationalizations that managers use to justify suspect behavior. What are these rationalizations?
Options:
A)
My Behavior Is Not Actually Illegal or Immoral
The Actions Are in the Company's Best Interests
No One Will Ever Find Out
The Company Will Reward Me
B)
My Behavior Is what the company expects
The Actions Are in the Company's Best Interests
No One Will Ever Find Out
The Company Will Protect Me
C)
My Behavior Is Not Actually Illegal or Immoral
The Actions Are in the Company's Best Interests
No One Will Ever Find Out
The Company Will Protect Me
D)
My Behavior Is Not Actually Illegal or Immoral
The Actions Are in My Best Interests
No One Will Ever Find Out
The Company Will Protect Me
Question 5- Under International Standards on Auditing, when is it appropriate to issue a disclaimer of opinion?
Options:
A)
When the auditor is unable to obtain sufficient appropriate audit evidence or when the auditor, despite having obtained sufficient appropriate audit evidence, concludes that misstatements, individually or in the aggregate, are both material and pervasive to the financial statements.
B)
When the auditor is unable to obtain sufficient appropriate audit evidence or when the auditor is faced with multiple uncertainties and, dispite obtaining sufficient appropriate audit evidence about each individual uncertainty, cannot form an opinion on the financial statements as a whole because of their interaction and their potential cumulative effect or when the auditor, despite having obtained sufficient appropriate audit evidence, concludes that misstatements, individually or in the aggregate, are both material and pervasive to the financial statements.
C)
When the auditor is faced with multiple uncertainties and, dispite obtaining sufficient appropriate audit evidence about each individual uncertainty, cannot form an opinion on the financial statements as a whole because of their interaction and their potential cumulative effect or when the auditor, despite having obtained sufficient appropriate audit evidence, concludes that misstatements, individually or in the aggregate, are both material and pervasive to the financial statements.
D)
When the auditor is unable to obtain sufficient appropriate audit evidence or when the auditor is faced with multiple uncertainties and, dispite obtaining sufficient appropriate audit evidence about each individual uncertainty, cannot form an opinion on the financial statements as a whole because of their interaction and their potential cumulative effect.
Question 6- Peanut Corporation of America officials conspired to defraud customers by shipping contaminated products.
Options:
A) True
B) False
Question 7- A tax preparer should avoid recommending or signing a return which reflects a position that the preparer knows, "exploits the audit selection process of a taxing authority, or serves as a mere arguing position advanced solely to obtain leverage in a negotiation with a taxing authority."
Options:
A) True
B) False
Question 8- In order for a CPA to practice before the IRS, the CPA:
Options:
A)
Must file a declaration with the IRS indicating the CPA is currently qualified as a CPA and authorized to represent the party.
B)
Must not be currently under suspension or debarment from practice before the IRS.
Must file a declaration with the IRS indicating the CPA is currently qualified as a CPA and authorized to represent the party.
Must have five years of tax experience.
C)
Must not be currently under suspension or debarment from practice before the IRS.
Must file a declaration with the IRS indicating the CPA is currently qualified as a CPA and authorized to represent the party.
D)
Must not be currently under suspension or debarment from practice before the IRS.
Question 9- Which of the following has the responsibility to regulate CPA firms that audit public companies?
Options:
A)
Public Company Accounting Oversight Board
B)
Public Company Accounting Oversight Board and Accounting Standards Board.
C)
Public Company Accounting Oversight Board and Auditing Standards Board
D)
Public Company Accounting Oversight Board and the Public Oversight Board
Question 10- Earning management is always illegal.
Options:
A) True
B) False
Question 11- Groupon failed to make required IPO disclosures.
Options:
A) True
B) False
Question 12- Why did the SEC investigate Bernie Madoff?
Options:
A)
The SEC saw the returns were too good to be true and elected to investigate.
B)
His sons went to the SEC after after Madoff confessed to them.
C)
The investors in Madoff's funds turned him in to the SEC when they started experiencing losses.
D)
Harry Markopolos reported Madoff to the SEC after he reverse engineered the investment strategy and saw that it was not legally possible to get the results that Madoff was getting.
Question 13- Martin Shkreli had a history of questionable behavior before he was finally arrested.
Options:
A) True
B) False