ACC 499
- Final Exam Part 2 (Chapters 8-10)
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Question 1
A member of the AICPA must
safeguard the confidentiality of client information. Auditors, however, must
disclose information to non-clients for the following reasons except to:
explain to members of the press the financial viability of a
client.
explain to members of the press the financial viability of a
client.
Question 2
4 out of 4 points
Independence is not required for
which of the following types of services?
consulting.
consulting.
Question 3
4 out of 4 points
In which of the following situations
would a CPA not be considered independent?
where the spouse of a CPA has obtained a home mortgage loan
in the current year.
where the spouse of a CPA has obtained a home mortgage loan
in the current year.
Question 4
4 out of 4 points
Mark Pulley is an auditor at
Pulley and Hurst, LLC. If Pulley's five-year-old daughter owns shares of stock
in McBurgers Corporation, then Pulley is considered to have what type of
interest in McBurgers Corporation?
direct interest in McBurgers Corporation.
direct interest in McBurgers Corporation.
Question 5
4 out of 4 points
Which one of the following is an
example of a conflict of interest for a CPA?
serving as legal counsel and an auditor for a client
serving as legal counsel and an auditor for a client
Question 6
4 out of 4 points
William Tyler, CPA, may not
accept a commission for recommending a product or service to which type of
client?
an attestation client.
an attestation client.
Question 7
4 out of 4 points
The ethical framework derived
from utilitarianism and rights theories indicates all of the following steps
except
identification of the legal issues.
identification of the legal issues.
Question 8
4 out of 4 points
Normally the auditor is not
permitted to divulge confidential information obtained from a client. Which of
the following situations would be a violation of this requirement?
to respond to the information request of a shareholder.
to respond to the information request of a shareholder.
Question 9
4 out of 4 points
Which of the following indicates
a strong internal control environment?
the internal audit group reports to the audit committee of
the board of directors
the internal audit group reports to the audit committee of
the board of directors
Question 10
4 out of 4 points
When duties cannot be segregated,
the most important internal control procedure is
supervision
supervision
Question 11
4 out of 4 points
The fundamental difference
between internal and external auditing is that
internal auditors represent the interests of the
organization and external auditors represent outsiders
internal auditors represent the interests of the
organization and external auditors represent outsiders
Question 12
4 out of 4 points
The importance to the accounting
profession of the Sarbanes-Oxely Act is that
management are required to certify their internal control
system
management are required to certify their internal control
system
Question 13
4 out of 4 points
Control activities under SAS
109/COSO include
general controls, application controls, and physical
controls.
general controls, application controls, and physical
controls.
Question 14
4 out of 4 points
Control risk is
the likelihood that the control structure is flawed because
controls are either absent or inadequate to prevent or detect errors in the
accounts
the likelihood that the control structure is flawed because
controls are either absent or inadequate to prevent or detect errors in the
accounts
Question 15
4 out of 4 points
The most cost-effective type of
internal control is
preventive control
preventive control
Question 16
4 out of 4 points
Which of the following suggests a
weakness in the internal control environment?
performance evaluations are prepared every three years
performance evaluations are prepared every three years
Question 17
4 out of 4 points
Tests of controls include
completing questionnaires
completing questionnaires
Question 18
4 out of 4 points
Which of the following taxes are
included in the total income tax expense of a corporation reported on its
Federal tax return?
Federal income taxes.
Federal income taxes.
Question 19
4 out of 4 points
Which of the following items are
not included in the financial statement income tax note effective tax rate
reconciliation?
Tax effect of temporary differences.
Tax effect of temporary differences.
Question 20
4 out of 4 points
Paint, Inc., a domestic
corporation, owns 100% of Blue, Ltd., a foreign corporation and Yellow, Inc., a
domestic corporation. Paint also owns 40% of Green, Inc., a domestic
corporation. Paint receives no distributions from any of these corporations.
Which of these entities' net income are included in Paint's income statement
for current year financial reporting purposes?
Paint, Blue, Yellow, and Green.
Paint, Blue, Yellow, and Green.
Question 21
4 out of 4 points
Hot, Inc.'s primary competitor is
Cold, Inc. When comparing relative deferred tax asset and liability accounts
with Cold, which of the following should Hot do?
Scale the deferred tax assets and liabilities by total sales
or total assets.
Scale the deferred tax assets and liabilities by total sales
or total assets.
Question 22
4 out of 4 points
Music, Inc., a domestic
corporation, owns 100% of Vinyl, Ltd., a foreign corporation and Digital, Inc.,
a domestic corporation. Music also owns 12% of Record, Inc., a domestic
corporation. Music receives no distributions from any of these corporations.
Which of these entities' net income are included in Music's income statement
for current year financial reporting purposes?
Music, Vinyl, and Digital.
Music, Vinyl, and Digital.
Question 23
4 out of 4 points
Which of the following items are
not included in the income tax note for a publicly traded company?
Breakdown of income among States.
Breakdown of income among States.
Question 24
4 out of 4 points
Which of the following represent
temporary book-tax differences?
Compensation-related expenses.
Compensation-related expenses.
Question 25
4 out of 4 points
North, Inc., earns book net
income before tax of $500,000 in 2010. In computing its book income, North
deducts $50,000 more in warranty expense for book purposes than allowed for tax
purposes. North has no other temporary or permanent differences. Assuming the
U.S. tax rate is 35% and no valuation allowance is required, what is North's
deferred income tax asset reported on its financial statements for 2010?
$17,500.
$17,500.
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