Chapter 04 Ethics and Professional Judgment in Accounting Answer
Key
Multiple Choice Questions
1.
Professional judgment is influenced by:
2.
Personal values link to:
3.
The KPMG Professional Judgment Framework defines judgment as:
4.
Which of the following is NOT a component of the KPMG Professional Judgment
Framework?
5.
Common judgment traps include:
6.
Which of the following is NOT a common judgment tendency?
7.
The anchoring tendency relates to:
8.
The SEC’s Advisory Committee on Improvements to Financial Reporting (CIFiR) developed
a framework for accounting judgments consisting of which components?
9.
Professional skepticism can best be defined as having:
10.
Professional skepticism links to professional judgment through the ethical standards of:
11.
Madison is in the process of gathering evidence to support the audit opinion on Jefferson
& Adams, Inc. She’s a new staff accountant and wants to make sure she exercises the
appropriate level of professional skepticism. Madison asks for your advice as the senior on
the audit. How best might you guide her as to the skepticism issues?
12.
Jacob just joined the firm of Gordon & Towns LLC. Prior to beginning his first group audit
assignment, Jacob asks to meet with his mentor, Isaac. He asks Isaac how making
judgments in an audit team setting differs from running an audit oneself. What is the best
advice for Isaac to give to Jacob?
13.
The International Federation of Accountants (IFAC) research report, Rebuilding Public
Confidence in Financial Reporting: An International Perspective, has as its goal which of
the following?
14.
The global code of ethics for the accounting profession is called:
15.
The statement made by Lynn Turner, former SEC chief accountant, “Are the auditors going
to serve management, or are they going to serve the best interests of the investing
public?”, refers to concerns about:
16.
Each of the following were themes of Congressional investigations of the accounting
profession during the 1970s and 1980s except:
17.
The committee that first recommended that the profession institute a voluntary program
for peer review was:
18.
The House Subcommittee on Oversight and Investigations made its recommendations
after looking into failures at each of the following companies except:
19.
During the investigations by the House Subcommittee on Oversight and Investigations, a
question that was raised was:
20.
In its investigation of ZZZZ Best, the House Subcommittee on Oversight and Investigations
looked into:
21.
During the period of failures at savings and loan institutions, Lincoln S&L was charged
with:
22.
The accounting issues at failed savings and loan institutions included:
23.
One of the Contributions of the Treadway Commission Report and the work of the
Committee of Sponsoring Organizations (COSO) was:
24.
The failure of Lehman Brothers was due in large part to:
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25.
The most significant change in the Revised AICPA Code of Professional Conduct is:
26.
The conceptual framework in the AICPA Code establishes a:
27.
The risk-based approach is used to assess:
28.
One reason independence in appearance is used to evaluate threats to independence is:
29.
Each of the following is a threat to independence except:
30.
An example of a management participation threat is:
31.
An example of a self-review threat is:
32.
Which of the following is NOT a safeguard that can help to mitigate threats to
independence?
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33.
Safeguards implemented by the attest client include each of the following except:
34.
The principle of ethical behavior in the AICPA Code that asks questions directly related to
ethical courage is:
35.
Impairments of independence can occur when:
36.
Independence may be impaired when a partner leaves an audit firm and is subsequently
employed by the client if that partner:
37.
An unacceptable threat to independence occurs when a CPA performs nonaudit services
for an audit client unless the CPA:
38.
An alternative practice structure can best be described as:
39.
The SEC’s position on independence can best be characterized as:
40.
PwC’s actions in their audits of Avon and Pinnacle were similar in that the SEC alleged
that the firm: