Set 2 - AU Chapter 4 Rules of Professional Conduct

Question 1

What are the 5 CPA values?

Answer 1

• Objectivity
• Integrity and due care
• Professional competence
• Confidentiality
• Professional behavior

Question 2

Are contingent fees allowed?

Answer 2

No

Question 3

Are auditors required to contact the predecessor auditor prior to accepting an engagement?

Answer 3

Yes

Question 4

Name the 5 threats to auditor independence

Answer 4

• Self-interest
• Self-review
• Advocacy
• Familiarity
• Intimidation

Question 5

What are the 3 types of safeguards that can be put in place to preserve independence?

Answer 5

• Profession safeguards, such as education and training provided by CPA
• Client safeguards, such as introduction of an audit committee
• Practitioner safeguards, such as a partner rotation policy