2.02 Quiz

Mary Baker, CPA, is preparing financial statements for The Brookline Company. Mary determines that certain GAAP requirements would be too costly for The Brookline Company. Mary prepares the statements but does not tell the client about not following the GAAP requirements. Which specific rule of conduct did Mary violate?

Accounting principles

Samuel is a CPA whose sister, Janet, is a Sales Representative for EZ Accounting Software. Samuel recommends EZ Accounting Software to all his audit clients. Janet pays Samuel 5% of the sale every time one of the clients purchases the software. Which specific rule of conduct is being violated?

Commission and referral fees

Jones CPA Firm received a request from AAA Credit for copies of Amy Johnson's federal tax return. Jones CPA Firm sent a copy of the tax return to AAA Credit without asking Ms. Johnson. Which specific rule of conduct is Jones CPA Firm violating?

Confidential client information

Betty's Bookkeeping Service posted a sign that stated "Members of the AICPA". The owner, Betty Wilson, has studied to take the CPA exam but has not yet taken it. Which specific rule of conduct did Betty's Bookkeeping violate?

Form of organization and name

Jonathan Smith, Inc., a CPA firm, prepares the audit for Mom's Diner. Mom's Diner is owned by Jonathan's aunt. Which specific rule of conduct is Jonathan Smith, Inc. violating?

Independence

In his job as an accounting clerk, Rick is required to communicate accounting information verbally, in writing, and using presentation software. Which 21st Century skill is Rick demonstrating?

Information and communication

Emily is careful to be correct when doing her accounting work and is truthful with her clients. This is an example of which key principle for ethics in accounting?

Integrity

Nancy Smith, CPA has only prepared financial reports in her business. She has been asked to prepare a federal tax return for Michael Brown. Smith refuses to accept the engagement based on her experiences. Which general standard is being followed?

Professional competence