A6 - Professional Responsibilities

Question 1

Non-audit services that do not exceed five percent of total revenues from an audit client:

Answer 1

Do not require audit committee preapproval as long as as the services are brought to the audit committee’s attention and approved before the completion.

Question 2

The auditor of an issuer may provide what tax services?

Answer 2

Permitted tax services include tax compliance, tax planning, and tax advice. The PCAOB prohibits tax services related to confidential or aggressive tax transactions and tax services to corporate officers of audit clients or immediate family members of corporate officers.

Question 3

Under Department of Labor (DOL) rules, independence is impaired when:

Answer 3

An auditor also serves as an investment advisor to the employee benefit plan.

Question 4

Under IFAC Code of Ethics, an auditor may provide_____________. These services may not be provided to audit clients under U.S. ethics standards

Answer 4

Internal Audit Services.

Question 5

Under the ethical standards of the profession, what investment in a client is NOT considered to be a direct financial interest?

Answer 5

An investment held through a nonclient regulated mutual fund.

Question 6

According to the AICPA Code of Professional Conduct, which of the following financial interests in the client during the period of the engagement impairs a CPA’s independence?

Answer 6

Only direct and material indirect financial interests.