Module 1: Professional Responsibilities

Question 1

Covered Member

Answer 1

a) An individual on the attest engagement team;
b) An individual in a position to influence the attest engagement.
c) A partner or manager who provides nonattest services to the attest client beginning once he or she provides ten hours of neonates services to the client within any fiscal year and ending on the later of the date:
1) the firm signs the report
2) he or she no longer expects to provide ten or more hours
d) A partner in the office in which the lead attest engagement partner primarily practices in connection with the attest engagement
e) The firm, including the firm’s employee benefit plans; or
f) An entity whose operating, financial, or accounting policies can be controlled by any of the individual or entities described in (a) through (e) or by two or more such individuals or entities if they act together.

Question 2

GAAP Private Sector: FASB (ASC)

Answer 2

FASB = Financial Accounting Standards Board for accounting principles for businesses. Issues ASC (Accounting Standards Codification).

Question 3

GAAP Private Sector: IASB [IFRS]

Answer 3

[Previously IAS (international accounting standards) from IASC (international accounting standards committee)]
IASB = International Accounting Standards Board for international accounting standards and issues IFRS (International Financial Reporting Sector)

Question 4

GAAP Private Sector: GASB

Answer 4

Governmental Accounting Standards Board for accounting principles for state and local governmental entities

Question 5

AICPA: SAS (Non-issuers) - [AU]

Answer 5

Statements on Auditing Standards for non-issues (non-publicly traded companies) and the code is AU-C

Question 6

AICPA: SSAE - [AT]

Answer 6

Statements on Standards for Attestation Engagements and code AT

Question 7

AICPA: SSARS - [AR]

Answer 7

Statements on Standards for Accounting and Review Services for complications and reviews and coded AR

Question 8

AICPA: ET

Answer 8

Ethics

Question 9

AICPA: QC

Answer 9

Quality Control

Question 10

AICPA: PFP

Answer 10

Personal Financial Planning

Question 11

AICPA: CS

Answer 11

Consulting Standards

Question 12

US Government: SEC

Answer 12

Securities & Exchange Commission: regulates publicly traded companies/ issuers

Question 13

US Government: SOX - PCAOB (ISSUERS)

Answer 13

Sarbanes Oxley Act of 2002 - A set of reforms that strengthened penalties for corporate fraud, restricted types of consulting CPAs can perform for audit clients, and created the Public Company Accounting Oversight Board to oversee CPAs and public accounting firms

Question 14

US Government: GAO

Answer 14

Governmental Accountability Office (GAO) mission is to support Congress in meeting its constitutional responsibilities and to help improve the performance and ensure the accountability of the federal government.

Question 15

US Government: DOL

Answer 15

Department of Labor (DOL) conducts most of its financial and performance audits following Government Auditing Standards, including audits of compliance with laws, evaluation of economy and efficiency of operations, and evaluation of effectiveness in achieving program results.

Question 16

IFAC: IAASB [ISA]

Answer 16

International Federation of Accountants
International Auditing & Assurance Standards Board
International Standards on Auditing

Question 17

IFAC: IESBA

Answer 17

International Ethics Standards Board for Accountants

Question 18

IFAC

Answer 18

International Federation of Accountants is a worldwide organization of national accounting bodies stabled to help foster a coordinated worldwide accounting profession with harmonized standards.

Question 19

Rule 503 - Commissions and Referral Fees

Answer 19

A member in public practice may not accept a commission for recommending a product or service to a client when the member or member’s firm also performs any of the following services for that client:

 a) Audit or reviews of financial statements
 b) Compilation when the member is independent and experts that a third party use the financial statements.
 c) Examinations of prospective financial information

Question 20

Indirect Financial Interest

Answer 20

An investment in which the specific investment decisions are not under the control of the investor. For example, an investment in a professionally managed mutual fund.