Answers: Question # Answer 1 2 3 4 5 6 7 8 9 10

For each of the following situations, indicate whether the CPA is independent with respect to the client. Answer Yes or NO (YES = CPA is independent or NO = CPA is not independent)

1. The CPAs dependent child owns an immaterial direct financial interest in the CPAs client. 2. The CPAs spouse owns an immaterial direct financial interest in the CPAs client. 3. The CPAs brother is a controller of the client. 4. The CPAs father is a salesman for the client. 5. The CPAs mother owns an immaterial direct financial interest in the client and the CPA is not aware of it.

Listed below are selected Rules and Ethical problems. Match the rule with the problem to which it applies.

Rules A. Independence B. Integrity and objectivity C. General standards D. Compliance with standards E. Accounting principles F. Contingent fees G. Acts discreditable H. Advertising and other forms of solicitation I. Commissions and referral fees J. Form of practice and name K. Confidential client information

You can use a rule more than once if needed 6. A CPA sells an audit client a new computer system. 7. A sole practitioner practices and advertises as a partnership firm. 8. A CPA robs a service station. 9. A CPA accepts a percentage of the clients loan as an audit fee, if the client receives the loan. 10. An audit client owes the CPA past-due fees.