In: Accounting
QUESTION 23
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
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
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
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 Bob’s 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
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. |