A government auditor's spouse is the finance director of the audited program. Under the GAGAS conceptual framework, what should the audit organization do first?
A. Identify the relationship as a threat and evaluate its significance
B. Issue a qualified opinion before beginning fieldwork
C. Ignore the relationship unless an actual misstatement is found
D. Ask the spouse to approve the planned safeguards
Source: 2024 Yellow Book paragraphs 3.27–3.28, conceptual framework for independence -- https://www.gao.gov/assets/d24106786.pdf
What assurance does an accountant provide in a compilation engagement under SSARS?
A. Reasonable assurance
B. No assurance
C. Limited assurance
D. Absolute assurance
Source: AR-C 80.04 — objective of a compilation engagement -- https://assets.ctfassets.net/rb9cdnjh59cm/30H0g7T5e1Rbd00RW9YJxE/2238c50381052f7c7748fabaef4fa205/ps-ar-c-sections.pdf.pdf
A CPA identifies a significant advocacy threat that is not specifically prohibited by the Code. No safeguard can reduce it to an acceptable level. What should the CPA do?
A. Document the threat and proceed because it is not expressly prohibited
B. Decline or discontinue the service that creates the threat
C. Proceed if the client signs an acknowledgment
D. Transfer the independence decision to the audit committee
Source: Step 4 and outcome when safeguards are unavailable -- https://www.aicpa-cima.com/resources/article/aicpa-conceptual-framework-approach
Who has overall responsibility for managing and achieving quality on an audit engagement?
A. The engagement partner
B. The client's chief financial officer
C. The internal audit director
D. The audit committee chair
Source: AU-C 220.13 — engagement partner responsibility for managing and achieving quality -- https://us.aicpa.org/content/dam/aicpa/research/standards/auditattest/downloadabledocuments/au-c-00220.pdf
An attest client gives the engagement partner an expensive vacation package unrelated to ordinary business hospitality. What is the most appropriate independence conclusion?
A. It is acceptable if received after fieldwork
B. The gift creates an unacceptable threat and should not be accepted
C. It is acceptable when disclosed only to the senior manager
D. It affects objectivity only when the client records it as compensation
Source: ET 1.285.010 — gifts and entertainment from attest clients -- https://pub.aicpa.org/codeofconduct/ethicsresources/et-cod.pdf
