FAR EASTERN UNIVERSITY INSTITUTE OF ACCOUNTS BUSINESS AND FINANCE PRINCIPLES OF ASSURANCE, PROFESSIONAL ETHICS AND GOOD GOVERNANCE quizno 3 Name zn enname nae Sector Seore: 7 PART! 1. FALSE 2 TRUE 3. TRUE 4. TRUE 5. TRUE 6. FALSE 7. TRUE 8 FALSE 9. TRUE 10. FALSE PARTI 26. Set review threat 27. No Toren Ex 28. Aévocacy threat 29, Settinterest thre 30, Intimidation Theest 31 Intimidation Theest, 32. No Threat Exists 33, Settinterest threat 34. Intimidation Theeat 35, NoThrest Exits u 2 13 aa 15 16 wy. 18, 19 20 36 37 38 39, 40 a 2 3 44 45, ‘QUIZ NO 3 ~ SUGGESTED ANSWERS FAISE 21. FALSE TRUE 22. TRUE FAISE 23, FAISE TRUE 24, TRUE FAISE 25, FAISE TRUE TRUE FAISE FAISE TRUE IntndationTheest Self review threat No Threst Exists ‘Advocacy threat Self review threat BoNUs Familiarity Threat, Intimidation Threat No Threst Exists Seleinteren trast8 3 a4 as 16 w 19 20 a 2 23 24 2 26 2. 28, 29, 30 BL 32 33 34 35, 36, 37 38 39, 40 roe o> een e>r>roemoezoexO@ PRELIM EXAM ~ SUGGESTED ANSWERS a 2 4 4 4s 46. ea 48 48, 50. st 2. 83. . ss. 56. 7 58. 59. 6. a a 6. «2 «3 «. 6. 66. 7 6 6 0.PART. True or False. Shade etter Af the statement i correc, shade letter Bis the statement is incorrect. 4. The principle of integrity imposes an obligation on all profesional accountants not to compromise their professional or business Judgment because of bas, conflict of interest or the undue influence of others. 2. Therequirement on independence entails independence of mind and independance in appearance. 3. The phases of professional competence include attainment of professional competence and maintenance of professional competence 4. Diligence encompasses the responsiblity to actin accordance withthe requirements ofan asignmant, careful, thoroughly and on atimely basis. 5. The need to comply withthe prindple of confidentiality continues even after the end of relationships between 2 professional accountant and 3 cent or employer. 6 Objecivty is required to be exercieed any in relation to ascurance services 7. The circumstances in which professional accountants operate may create epectc threats to compliance with the fundamental Principles. isimpossiblata define every stuation that cestesthreateto compliance withthe fundamental principles and specty the appropriate acon. When a CPA markets his or her professional srvicesinan exaggerated manner, integrity i primariy violates. 5. Confidentiality must be observed even in social environment 420. The requirement on confidentiality is absolute without exception. 31. When a CPA ses first sign of ethical conflict in practicing his profession, he must immediately seek the assistance of NBI 32. When aprotessonal accountant identifies treats to compliance withthe fundamental prinples and, based on an evaluation af those threats, determines that they are not at an acceptable level, the professianal accountant shall determine whether appropriate safeguards are avalible and can be applied to eliminate the threats or reduce them to an acceptable level 413. A professional accountant may inadvertently volte a provision of the Code af Ethics. Such an inadvertent velation Is already considered to having compromised the profesional accountants compliance with the fundamental principles since such actions fare not aligned wih the fundamental principles. 36. A professional accountant may be required te cesolve a conflict in complying withthe fundamental princes. 35. When a professional accountant ie confronted with a stuation invahing ethical conflict, the professional accountant must immediately resign from the firm ar employing organization, 426, In ethical conflict resolution, it maybe in the best imerests ofthe professional accountant to dacument the substance athe issue, the details of ay discussions hel, and the decisions made concerning tht issue 17, ifthe esut or outcome afthe engagements based on judgement of an authortative third party, it isnot considered as contingent tee asfararthe Code s concerned 38. ACPA olds share of stock under his own name wih an aesurance client aut af a milion shares outstanding ofthe sad len. is acceptable since the CPA holds only an immaterial amount of intrest over the dent, 38. When a member ofthe assurance team had recenty been employed by the client ina postion to exert significant influence over the subject matter of the engagement, 2 familiarity threat arises. 20. Safeguards that may eliminate or reduce threats to an acceptable evel fall imo two broad categories: (3) Safeguards created by the profession, legislation or regulation; and o) Safeguards in the work environment. 21. The same team providing management consuiting to 2 diant can be the same team rendering assurance services forthe same lent 22. Immediate family member include spouse (or equivale and children who are dependents of the professional accountant 23. A protessional accountant feeling pressured to agree with the judgment ofa cient employee because the employee has more txpertze on the matter in question gives ree to famiiaty threat, 24. Amember ofthe assurance team being, of having recently been, emplayed bythe cient ina postion to exer significant influence over the subject matter of the engagement gives rise to self-review threat 25. A CPAIn businssis obligated to suppor ll aims of his or her employing organization