Professional Responsibilities

Question 1

What body issues permits to practice for CPAs?

Answer 1

State Board of Accountancy

Question 2

T/F

The AICPA Uniform Accountancy Act (UAA) requires all accountants to be licensed?

Answer 2

FALSE

Question 3

T/F

The AICPA Uniform Accountancy Act (UAA) contains provisions for continuing education

Answer 3

TRUE

Question 4

T/F

Conviction for a felony or a misdemeanor may result in automatic expulsion from the AICPA?

Answer 4

FALSE

Only a felony results in an automatic expulsion. A misdemeanor does not

Question 5

For an auditor, what is the best defense when being sued for ordinary negligence?

Answer 5

That you followed GAAS

Question 6

For an auditor, what is the best defense when being sued for actual fraud?

Answer 6

That there was no deceit

Question 7

For an auditor, what is the best defense when being sued for constructive fraud/gross negligence?

Answer 7

That you did not act recklessly or with intent to deceive

Question 8

When an auditor unknowingly caused harm how are they responsible? (proportionally or jointly?)

Answer 8

Proportionally (%)

Question 9

When an auditor knowingly caused harm how are they responsible? (proportionally or jointly?)

Answer 9

Jointly

Question 10

T/F

If the IRS issues a 30-day letter to an individual taxpayer who wishes to dispute the assessment, the taxpayer may ignore the 30-day letter and wait to receive a 90-day letter

Answer 10

TRUE

A taxpayer who wishes to dispute the findings has 30 days to either request a conference with an appeals officer or to file a written protest letter. Alternately they may elect to do nothing during the 30-day period and await a 90 day letter. The taxpayer would then have 90 days to file a petition with the Tax Court.

Question 11

T/F

If the IRS issues a 30-day letter to an individual taxpayer who wishes to dispute the assessment, the taxpayer may (without paying any tax) immediately file a petition that would properly commence an action in Tax Court

Answer 11

FALSE

The taxpayer must receive a 90-day letter before a petition can be filed in tax court

Question 12

T/F

If the IRS issues a 30-day letter to an individual taxpayer who wishes to dispute the assessment, the taxpayer must file a written protest within 10 days of receiving the letter

Answer 12

FALSE

The taxpayer has a 30-day period during which to file a written protest letter or to request a conference with an appeals officer

Question 13

If the IRS issues a 30-day letter to an individual taxpayer who wishes to dispute the assessment, the taxpayer must pay the taxes and then commence an action in federal district court

Answer 13

FALSE

This is not required. A taxpayer may choose to pay the additional taxes and file a claim for refund. When the refund claim is disallowed, the taxpayer could then commence an action in federal district court.

Question 14

T/F

A practitioner may charge a contingent fee for representing a client in connection with a judicial proceeding

Answer 14

TRUE

Question 15

Circular 230 limits practice before the IRS to whom?

A) CPAs
B) Attorneys
C) Registered Tax Return Preparers
D) All of the Above

Answer 15

D

Question 16

According to Circular 230, practicioners must not sign a tax return if the return takes a position that does not have a reasonable basis. What is a reasonable basis?

Answer 16

20% Chance