AUD2 CH1 - 3

One of the key reasons for maintaining ethical conduct in the auditing profession is to:

• Ensure auditors have financial benefits

• Prioritize the interests of clients over regulatory standards

• Limit professional liability for auditors

• Raise public confidence in the integrity of the auditing process

The statement "Integrity implies only honesty, not including fair dealing and truthfulness" is incorrect because integrity also includes which of the following?

• Only truthfulness

• Fair dealing and truthfulness

• Transparency and clarity

• Accountability in financial statements

The principle of "not allowing biases to influence professional judgment" refers to which principle in the MIA By-Laws?

• Integrity

• Objectivity

• Professional competence and due care

• Professional behavior

Which of the following is generally considered unethical in the context of auditing and accounting services?

• Charging fees based on time spent working on the client's account

• Charging fees based on the financial outcomes or results achieved by the client

• Charging a flat fee for auditing services

• Charging fees based on the complexity of the work required

Which of the following actions is considered unethical for an auditor under professional ethical standards?

• Accepting a commission for recommending a client’s services

• Charging a reasonable fee for services rendered

• Providing advice that benefits the client’s financial outcomes

• Offering a discount on audit fees to a long-standing client

Below are factors that may compromise the MIA By-Laws, except:

• Financial dependence on a single client

• Involvement in a personal relationship with a client’s management

• Accepting a commission for recommending a client’s services

• Maintaining independence and objectivity in providing services

Which are the following is not the threats to independence?

• Self-interest threat

• Self-review threat

• Confidentiality threat

• Familiarity threat

"The threat that a financial or other interest will inappropriately influence a professional accountant’s judgment or behavior".

Which threat is referred to?

• Self-interest threat

• Familiarity threat

• Intimidation threat

• Self-review threat

What is the primary purpose of auditor's liability?

• To ensure auditors earn higher fees

• To protect stakeholders from financial harm

• To increase the financial statements' complexity

• To limit the role of auditors in financial reporting

What does auditor's liability ensure regarding auditors' work?

• Auditors maintain low fees for their services

• Auditors can ignore minor errors in financial statements

• Auditors maintain high standards of professional care and integrity

• Auditors are not held responsible for errors