QUESTION 23

1. Which statement is most true regarding fraud?

   	I.	Internal auditors are required to assess it based on the SOX act.
   	II.	Fraud can never be controlled because Accountants do not have authority to prosecute fraud within organizations.
   	III.	Accountants along with other assurance functions within an organization should focus on mitigating opportunities of fraud.
   	IV.	Fraud can never be controlled because collusion always occurs in organizations.

3 points

QUESTION 24

1. Which of the following are examples of financial statement fraud

   I Inflating revenue

   II Employee physically absconding with cash from the bank vault.

   III Underreporting debtI

   V Changing the vendor master file without authorization

   	a.	I and III
   	b.	I, II and IV
   	c.	I and II
   	d.	III and IV

3 points

QUESTION 25

1. Apply the Confidential Client Information Rule for questions 25 to 27.

   An Accountant with the City of Pomona receives a data request from the Marketing division. The Marketing division manager asks for prior year financial data. The Accountant emails the data without informing the Accounting Manager. Is this a violation of the Confidential Client Information Rule and why?

   	I.	Yes, the Accountant did not audit the data and did not get permission from the Accounting Manager.
   	II.	No, the Accountant and the Marketing Manager works for the same entity. But in practice the Accounting Manager should have been notified.
   	III.	Yes, accounting information is proprietary to the Accounting Department.
   	IV.	No, accounting data is never confidential.

3 points

QUESTION 26

1. Apply the Confidential Client Information Rule for questions 25 to 27.

   You are a Tax preparer for an Accounting firm. You specialize in preparing tax returns for the shoe retail sector. You tell your client Bobs Shoes that Big Five Sporting has 3 employees in the tax department and they use CCH software to prepare their returns. Is this a violation of the Confidential Client Information Rule and why?

   	I.	No, the confidentiality rule does not apply to tax preparation services
   	II.	Yes, your clients are competitors and have a conflict if information is shared with one another.
   	III.	Yes, the number or employees and tax software used is confidential information.
   	IV.	No, you did not reveal any data within the tax returns

3 points

QUESTION 27

1. Apply the Confidential Client Information Rule for questions 25 to 27.

   You are engaged to prepare a tax return for Ms. Smith. You receive a call from Ms. Taylor indicating they recently got engaged. You provide Ms. Taylor the draft tax return so she can review only. Is this a violation of the Confidential Client Information Rule and why?

   	I.	Yes, the tax return was not complete.
   	II.	Yes, the client relationship is solely with Ms. Smith
   	III.	No, you only provided for review purposes. Since she did not sign there is no violation.
   	IV.	No, legally Ms. Taylor is entitled to the tax return.