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5. In which of the following instances would independence be considered to be impaired? The CPA has been retained as the auditor of a company a. and the CPA lives in the same town as the controller. b. in which the CPA's brother is the controller. c. which owes the CPA audit fees for current year services. The company being audited has just filed a petition for bankruptcy. d. All of the above. 6. The partner of ABC CPA firm doing the audit of Emily Anne Company owns a few shares of EmilyAnne Company common stock (worth about $20). Thus ABC CPA firm would not be considered independent of EmilyAnne Company. What concept is most likely involved? (consider for final exam) a. Independence in appearance b. Independence in attitude c. Independence in exercise d. Independence in fact 7. in which of the following circumstances would a CPA be allowed to disclose any confidential information obtained during the course of a professional engagement? a. The CPA receives a request from a local newspaper about a recent audit of a company. b. A major stockholder of a client company seeks accounting information from the CPA after management declined to disclose the requested information. c. To comply with an investigative or disciplinary hearing. d. As an assignment, auditing students ask to look at the CPA's audit work papers. e. For all of the above, information can be disclosed without problems relating to confidentiality. 8. What "refers to a system ... based on moral duties and obligations that indicate how an individual should interact with others in society a. Auditing c. Code of behavior b. Ethics d. Professionalism 9. Which ethical theory is "... Important to auditors because of their public interest responsibility...? see page 632] a. Utilitarianism. b. Rights-based approach. c. Professional skepticism. d. Justice-based approach. 10. A CPA uses "discrimination and harassment in employment practices". This would involve which of the following? a. Acts Discreditable Rule. b. Compliance with Standards Rule. c. General Standards Rule. d. Independence Rule.

Answer 1

5. (C)

6. (A)

7. (E)

8. (D)

9. (C)

10 (C)

Auditors independency, confildentiality, professionlism is must in all the cases.