other ethic codes

Question 1

audit firms must rotate lead audit partner and reviewing audit partner every_____.
Other partners playing a significant role in the audit must rotate every ______.

Answer 1

5 years

7 years

Question 2

auditors must report to the _____

Answer 2

Audit Committee

Question 3

auditors are compensated, hired, terminated, by the ____

Answer 3

audit committee and not managment.

Question 4

each audit firm must timely discus to the audit commitee

audit firm must go to the audit commitee and say this so the audit commitee can make an informed decision if they want to be as aggressive as management is trying to be

Answer 4

all critical accounting policies and practices used

all alternative treatments of financial info discussed with management officials, ramifications of their use, and the treatment preferred by the accounting firm

other material written communications between acc firm and client management

Question 5

must wait one year if a former auditor leaves and becomes_____.If worked for firm but did not participate in audit then no big deal

Answer 5

ceo, cfo, controler, etc

Question 6

in SOX, congress created the PCAOB to _____.

the SEC oversees the _____.

Answer 6

regulate firms that audit public companies

PCAOB

Question 7

Pcaob functions

Answer 7

registers public acc firms
establish auditing standards, quality control, ethics,control, ethics standards

conducts inspections of those acc firms
conducts investigations
disciplinary proceedings
enforce compliance with sox
with own rules
regulation security laws

Question 8

registration with the PCAOB-information to be disclosed is

Answer 8

names of all clients in past year
fees for audit and nonaudit services
statement of firm quality control policies
list accountants in firm who took place in audit
list of all accountants associated with the firm who participated in the audits
copies of disclosures with disagreement

Question 9

its auditing standards must include 3 rules

Answer 9

auditors must retain work papers for 7 years

an accounting firm must provide a concurring or second partner to review and approve each audit report

the firm must describe in each audit report the scope of testing of internal control, structure and procedure of issuer and prevent the findings of such testing, evaluation of internal control structure, description of material weakness, any material noncompliance found

Question 10

firms who audit more that 100 companies a year get audited every___.

firms less than 100 firms get audited every ___

Answer 10

year

3 years

Question 11

pcaob fines are

Answer 11

750k for individual

15 million for an entity

Question 12

gao (government accountability office) had these key ethical principles

Answer 12

the public interest
integrity
objectivity
proper use of government information, resources, and position
professional behavior

Question 13

GAO) audit organizations and individual auditors whether gov or public must be free of three types of independence impairments (and must avoid the appearance of such impairments)

Answer 13

personal impairments-family relationships, financial interest, employment relationships, prospective employment, self review,

external impairments-bias. preconceived ideas toward a group or individual. ex political. client putting pressure to lessen work to reduce cost or fees. client inteferes with selection or application of audit procedures. unreasonable restrictions to complete the audit. imposed restrictions to access of records. threat to replace auditor over audit findings etc

organizational impairments-audit function is organizationally located within the reporting lines of areas under audit.

Question 14

GAO-independence rules

Answer 14

different branch of gov can audit different branch of gov

fed can audit state. state can audit local etc