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UOP ACC 491 Week 2 Ethics, Legal Liability .pdf



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UOPACC 491 Week 2 Ethics, Legal Liability, Audit
Responsibilities Quiz NEW
http://www.uopassignments.com/acc-491-uop/acc-491-week2-ethics-legal-liability-audit-responsibilities-quiz-recent
For more classes visit
http://www.uopassignments.com/
ACC 491 Week 2 Ethics, Legal Liability, Audit Responsibilities
Quiz NEW

Question 1

One of the main reasons people act unethically is that they
choose to act selfishly.
True
False

Question 2

Which of the following best describes the reason why an
independent auditor reports on financial statements?

Poorly designed internal controls may be in existence.
A misstatement of account balances may exist and is generally
corrected as the result of the independent auditor's work.
Different interests may exist between the company preparing
the statements and the persons using the statements.
A misappropriation of assets may exist, and it is more likely to
be detected by independent auditors.

Question 3

Because of the risk of material misstatement, an audit should
be planned and performed with an attitude of

independent integrity.
professional skepticism.
impartial conservatism.

objective judgment.

Question 4

Recklessness in the case of an audit is present if the auditor
knew an adequate audit was not done but still issued an
opinion, even though there was no intent to deceive financial
statement users. This description is the legal term for:

fraud.
constructive fraud.
gross negligence.
ordinary negligence.

Question 5

In the performance of an audit, a CPA:

must exercise constructive professional care in the
performance of their audit responsibilities.

is legally liable for detecting an immaterial client fraud.
must strictly follow GAAP for privately held clients.
must exercise due professional care in the performance of their
audit responsibilities.
Question 6

The major reason an independent auditor gathers audit
evidence is to

assess control risk.
form an opinion on the financial statements.
detect fraud.
evaluate management.

Question 7

Ethics are:
a set of moral principles or values.
not formed by life experiences.

always incorporated in laws.
needed in the professions, but is not needed for society in
general.

Question 8

If the auditor believes that the financial statements are not
fairly stated or is unable to reach a conclusion because of
insufficient evidence, the auditor:

should notify regulators of the circumstances.
should withdraw from the engagement.
should request an increase in audit fees so that more resources
can be used to conduct the audit.
has the responsibility of notifying financial statement users
through the auditor's report.
should notify regulators of the circumstances.

Question 9

The objective of an audit of the financial statements is an
expression of an opinion on:

the fairness of the financial statements in all material respects.
the accuracy of the financial statements.
the accuracy of the annual report.
the fairness of the financial statements in all material respects.
the accuracy of the balance sheet and income statement.

Question 10

________ means that a person acts according to conscience,
regardless of the situation.

Respect
Fairness
Integrity
Caring

Question 11

How does the prudent person concept affect the liability of the
auditor?

The prudent person concept states that a person is responsible
for conducting a job in good faith, integrity, and with
qualifications and attention that prevents errors. Therefore,
the auditor is expected to conduct an audit using such due care
that they can guarantee the accuracy of the financial
statements.

The prudent person concept states that third parties can
confidently rely on the independence of the auditors in their
work. However there is liability to the auditors if they hide
their lack of independence or they mislead the third parties.

The prudent person concept states that a person is responsible
for conducting a job in good faith and with integrity, but is not
infallible. Therefore, the auditor is expected to conduct an audit
using due care, but does not claim to be a guarantor or insurer
of financial statements.

The prudent person concept states that auditors are
responsible for the accuracy of the financial statements that are
prepared, but only based on his or her good faith. Therefore,
the auditor must keep up with accounting standards to ensure
compliance.

Question 12

What is an ethical dilemma?

An ethical dilemma is a situation that a person faces in which a
decision must be made about the appropriate behavior.

An ethical dilemma is a synonym for a legal dilemma.
None of the above
An ethical dilemma in accounting occurs when an error in the
financial statement has been discovered.

Question 13

What are the six core ethical values described by the Josephson
Institute?

(1) Compassion, (2) Respect, (3) Loyalty, (4) Fairness, (5)
Unbiased, and (6) Trustworthiness
(1) Trustworthiness, (2) Respect, (3) Responsibility, (4)
Fairness, (5) Caring, and (6) Citizenship
(1) Caring, (2) Compassion, (3) Friendliness, (4) Respect, (5)
Trustworthiness, and (6) Morality
(1) Respect, (2) Loyalty, (3) Fairness, (4) Unbiased, (5)
Compassion, and (6) Caring

Question 14

Distinguish between "fraud" and "constructive fraud."

The difference between fraud and constructive fraud is that
fraud can occur when there is a misstatement due to
recklessness of the auditor whereas in constructive fraud the
intent to deceive will cause extensive harm damaging the
company.


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