Code of Ethics 3

What fundamentals ethical principles requires a professional accountant to be straight forward and honest in all professional and business relationships?

What fundamentals ethical prohibited association of professional accountants with report, returns, communications and other information that is believed to contain a materially false or misleading statement

What threats to compliance with the fundamental principles may occur as a result of the financial or other interests of a professional accountant or of an immediate or close family member?

What threat to independence may be created when the fees generates by the assurance client present a large proportion of the revenue of an individual of the firm?

Safeguards created by the profession, legislation include the following except

• Continuing professional development requirements

• Professional standards

• Firm-wide and engagement specific safeguards

• Education, training and experience requirement for entity into the profession

The following are examples of circumstances that may create familiarity threats, except

• Promoting shares in a listed entity when that entity is a financial statement audit client.

• Long association of a personnel with the assurance client

• A member of the engagement team having a close or immediate family relationship with the director or office of the client

• A former partner of the firm being a director of the client or an employee to a position to exert direct and significant influence over the subject matter of the engagement

On which of the following safeguards a professional accountant in public practice cannot rely solely to reduce threats to an acceptable level?

• Firm-wide safeguards

• Safeguard created by a profession, legislation or regulation

• Engagement specific safeguards

• Safeguards within the clients system and procedures

Which of the following is not a contingent fee?

• A fee that is dependent upon approval of the assurance client’s loan application

• An audit fee that is based on 5% of the clients adjusted net income for the current year

• A fee that is fix by a court or other public authority

• An arrangement whereby no fee will be charged unless a specified finding or result is attained

Which of the following most completely describes how independence has been defined by the accountancy profession

• Processing the ability to act with integrity, and exercise objectivity and professional skepticism

• Accepting responsibility to act professionally and in accordance with laws and regulations

• Avoiding the appearance of significant interests in the affairs of an assurance client

• Performing an assurance service from the viewpoint of the public

Using the same engagement partner or the same individuals for the engagement quality control review on a financial statement audit over a prolonged period may create a

• Self-review threat

• Intimidation threat

• Familiarity threat

• Self-interest threat