10/18/23,
11:49
PM
Lesson
06
Quiz:
ACC
450:
Principles
of
Auditing
(2023
Fall
-
B)
Lesson
06
Quiz
Due
Oct
24
at
11:59pm
Points
10
Questions
10
Available
until
Oct
24
at
11:59pm
Time
Limit
None
Allowed
Attempts
Unlimited
Instructions
Some,
but
not
all,
of
the
responses
have
explanations
for
why
they
are
correct
or
incorrect.
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Submitted
Oct
18
at
11:49pm
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took
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1
minute.
Question
1
1/1
pts
Which
of
the
following
analogies
illustrates
best
the
need
for
auditors’
independence
from
their
clients?
https://canvas.asu.edu/courses/159839/quizzes/1199876
1/8
10/18/23,
11:49
PM
Correct!
Lesson
06
Quiz:
ACC
450:
Principles
of
Auditing
(2023
Fall
-
B)
A
mechanic
who
is
the
car
salesperson’s
father
is
likely
to
give
an
honest
opinion
about
the
car’s
mechanical
state
A
mechanic
who
is
the
car
salesperson’s
father
is
unlikely
to
give
an
objective
opinion
about
the
car’'s
mechanical
state
——
~
Nice
job!
Review
page
87
of
the
text
which
explains
why
auditors
should
not
be
incentivized
by
the
success
of
the
company
they
are
auditing.
Now
get
back
to
work.
|
|
A
mechanic
who
is
the
car
salesperson’s
father
is
unlikely
to
be
as
competent
as
an
unrelated
mechanic
would
have
been
in
giving
an
opinion
about
the
car’s
mechanical
state
A
mechanic
who
is
the
car
salesperson’s
father
is
likely
to
be
as
competent
as
an
unrelated
mechanic
would
have
been
in
giving
an
opinion
about
the
car’'s
mechanical
state
Question
2
1/1
pts
Correctl
Which
of
the
following
is
an
example
of
impaired
independence
in
fact?
®
A.
The
auditor
was
not
in
compliance
with
one
of
the
independence
requirements
in
the
applicable
audit
guidance
i
Nice
job!
Review
pages
88-90
of
the
text
for
information
on
~
independence
in
fact
versus
independence
in
appearance.
Now
get
back
to
work.
https://canvas.asu.edu/courses/159839/quizzes/1199876
2/8
10/18/23,
11:49
PM
Lesson
06
Quiz:
ACC
450:
Principles
of
Auditing
(2023
Fall
-
B)
B.
The
audit
partner’s
and
the
CFQO'’s
families
are
friends
and
regularly
spend
holidays
together
abroad
Both
A
and
B
None
of
the
above.
Question
3
1/1
pts
Correctl
Which
of
the
following
is
an
example
of
potentially
impaired
independence
in
appearance?
A.
The
auditor
was
not
in
compliance
with
one
of
the
independence
requirements
in
the
applicable
audit
guidance
®
B.
The
audit
partner’s
and
the
CFO’s
families
are
friends
and
regularly
spend
holidays
together
abroad
———
Nice
job!
Review
pages
88-90
of
the
text
for
information
on
independence
in
fact
versus
independence
in
appearance.
Now
get
~
back
to
work.
-
.
—
Both
A
and
B.
None
of
the
above.
Question
4
1/1
pts
https://canvas.asu.edu/courses/159839/quizzes/1199876
3/8
10/18/23,
11:49
PM
Correctl
Lesson
06
Quiz:
ACC
450:
Principles
of
Auditing
(2023
Fall
-
B)
In
which
of
the
following
cases
can
an
audit
firm
audit
the
company
without
violating
independence
rules?
The
firm
is
not
independent,
but
all
auditors
on
the
audit
team
are
independent
The
firm
is
independent
and
only
one
of
the
auditors
on
the
audit
team
is
not
independent
All
auditors
on
the
audit
team
are
independent;
the
firm
is
not
independent,
but
will
be
by
the
time
the
partner
prepares
the
engagement
letter
—
é
Nice
job!
Review
pages
90-91
of
the
text
for
information
on
l
independence
of
an
audit
firm
and
independence
of
an
individual
~auditor.
Now
get
back
to
work.
None
of
the
above
cases
would
allow
the
audit
firm
to
audit
the
company
without
violating
independence
rules
Question
5
1/1
pts
What
was
the
primary
reason
why
three
of
the
four
largest
firms
remaining
after
Arthur
Andersen’s
demise
sold
their
consulting
practices
in
the
early
2000s?
The
market
conditions
were
exceptionally
good,
so
it
was
a
good
time
to
sell
https://canvas.asu.edu/courses/159839/quizzes/1199876
4/8
10/18/23,
11:49
PM
Correctl
Correct!
Lesson
06
Quiz:
ACC
450:
Principles
of
Auditing
(2023
Fall
-
B)
g
Sarbanes-Oxley
Act
of
2002
prohibited
audit
firms
providing
consulting
services
to
audit
clients
——
Nice
job!
Review
pages
98-99
of
the
text
for
information
on
why
the
largest
firms
sold
their
consulting
practices.
Now
get
back
to
work.
It
was
a
coincidence
Sarbanes-Oxley
Act
of
2002
required
audit firms
to
sell
their
consulting
services
Question
6
1/1
pts
How
are
audit
firms
able
to
provide
consulting
services
today
without
violating
independence
requirements?
A.
Audit
firms
provide
consulting services
primarily
to
non-audit
clients
B.
Prior
to
providing
most
consulting
services,
audit
firms
carefully
track
any
independence
issues
that
may
arise
)
Aand
B
-~
Nice
job!
Review
pages
98-99
of
the
text
which
explains
how
audit
~
firms
are
allowed
to
provide
consulting
services.
Now
get
back
to
-
work.
S
None
of
the
above
https://canvas.asu.edu/courses/159839/quizzes/1199876
5/8
10/18/23,
11:49
PM
Lesson
06
Quiz:
ACC
450:
Principles
of
Auditing
(2023
Fall
-
B)
Question
7
1/1
pts
Generally,
audit
guidance
permits
auditors
to
provide
which
of
the
following
non-audit
services
to
audit
clients?
Tax
services
Letters
on
compliance
with
debt
covenants
Statutory
audits
Correctl
)
All
of
the
above
Nice
job!
Review
page
100
of
the
text
which
provides
information
on
which
non-audit
services
can
be
provided
to
audit
clients.
Now
get
back
to
work.
——
Question
8
1/1
pts
Both
the
individual
auditor
and
the
audit
firm
will
likely
violate
independence
rules
in
which
of
the
following
cases?
An
audit
partner
of
the
firm
joined
the
company
as
its
new
CFO,
and
the
audit
firm
resigned
as
the
auditor
of
the
company
as
soon
as
it
learned
about
the
new
appointment.
Correctl
®
For
his
birthday,
an
audit
partner
received
a
gift
from
the
CFO
of
the
company
being
audited—a
pair
of
Super
Bowl
tickets
for
him
and
his
wife,
worth
slightly
less
than
$10,000.
However,
the
partner
insisted
on
paying
the
CFO
back
50%
of
the
price.
———
"
Nice
job!
Review
the
general
rules
provided
on
pages
91-98
of
the
-
text.
Now
get
back
to
work.
https://canvas.asu.edu/courses/159839/quizzes/1199876
6/8
10/18/23,
11:49
PM
Lesson
06
Quiz:
ACC
450:
Principles
of
Auditing
(2023
Fall
-
B)
The
audit
partner
has
$100,000
invested
in
a
major
mutual
fund
that
invests
2%
of
its
funds
into
the
audit
client.
All
of
the
above
Question
9
1/1
pts
Correct!
Which
of
the
following
is
not
an
aspect
of
the
AICPA’'s
Independence
Threat
Evaluation
Framework?
Is
there
a
significant
threat
to
auditor’s
independence
with
respect
to
the
client?
Does
the
AICPA
Code
of
Professional
Conduct
address
this
particular
threat?
Are
there
safeguards
that
would
reduce
the
threat
to
an
acceptable
level?
Is
the
risk
from
violating
the
AICPA
Code
of
Professional
Conduct
acceptable
to
the
auditor?
"
Nice
job!
Review
the
framework
on
page
89
of
the
text.
Now
get
back
~
to
work.
Question
10
1/1pts
https://canvas.asu.edu/courses/159839/quizzes/1199876
7/8
10/18/23,
11:49
PM
Lesson
06
Quiz:
ACC
450:
Principles
of
Auditing
(2023
Fall
-
B)
Which
of
the
following
is
most
likely
to
make
Amy,
an
audit
staff
member,
not
independent
of
Solar
Devils
Inc.?
Amy
has
a
$5,000
investment
in
a
mutual
fund
that
has
4%
of
its
funds
invested
in
Solar
Devils
Inc.
This
mutual
fund
owns
less
than
2%
of
Solar
Devils
Inc
Correctl
®
Through
her
brokerage,
Amy
purchased
one
stock
of
Solar
Devils
Inc.
The
stock
is
worth
less
than
$100—an
amount
that
is
immaterial
to
Amy.
"
Nice
job!
Review
the
general
rules
provided
on
pages
91-98
of
the
~
text.
Now
get
back
to
work.
The
amount
that
is
immaterial
(or
material)
to
Amy
is
irrelevant.
-
Purchasing
stock
of
a
company
that
your
firm
is
auditing
through
a
.
brokerage
is
a
violation
of
independence.
Amy’s
brother
works
at
Solar
Devils
Inc.
as
a
Sales
Manager
Amy’s
father
has
a
time-share
of
a
condo
in
California.
Her
father
told
her
that
the
company’s
CFO
also
has
a
time-share
of
the
same
condo.
The
time-share
is
immaterial
to
Amy’s
father
and
to
the
CFO.
Quiz
Score:
10
out
of
10
https://canvas.asu.edu/courses/159839/quizzes/1199876
8/8
