AICPA 4-11

Card Set Information

AICPA 4-11
2011-04-11 12:48:57
AICPA quiz

AICPA quiz
Show Answers:

  1. Engagement letter should include:
    • Objectives of the engagement
    • Services to be performed
    • CPA's responsibilities
    • Client's acceptance of its responsibilities
    • Any limitations of the engagement
  2. If you fail to do an engagement letter...
    Independence is not impaired, but in violation of Rule 202.
  3. Things you cannot do when performing non-attest services:
    • Authorizing a transaction in your client's absence or without authority to do so
    • Preparing any source documents
    • Having custody of client assets
    • Supervising client employees
  4. Bookkeeping services that would not impair independence
    • Recording transactions that management has determined the appropriate classifications
    • Preparing financial statements based on the trial balance
    • Posting client approved entries to the trial balance
    • Proposing standard, adjusting, or correcting journal entries (as long as the client reviews the entries and understands them)
  5. Bookkeeping services that would impair independence
    • Determining/changing journal entries, accounting codes, or classifications without client approval
    • Authorizing/approving transactions
    • Preparing source documents
    • Making unapproved changes to source documents
  6. For everyone, independence is impaired if...
    • Have a fianncial interest exceeding 5% of the entity's outstanding securities
    • Is a director, officer, or employee of the client
    • Is a promoter, underwriter, or voting trustee of the client
    • Is a trustee to any pension or profit-sharing trust of the client