ACCT 444 Week 1 Quiz

tax service.
accounting and bookkeeping service.
Chapter 1
5. (TCO 1) Which of the following statements is incorrect regarding the SEC’s partner rotation
rules? (Points: 3)
The lead and concurring partners are subject to a 5-year time out period.
All audit partners must rotate off the audit engagement after 5 years.
Other audit partners are subject to a 2-year time out period.
Small firms may be exempted from the partner rotation requirement.
6. (TCO 3) Burrow & Co., CPAs, have provided annual audit and tax compliance services to Mare
Corp. for several years. Mare has been unable to pay Burrow in full for services Burrow rendered
19 months ago. Burrow is ready to begin fieldwork for the current year’s audit. Under the ethical
standards of the profession, which of the following arrangements will permit Burrow to begin the
fieldwork on Mare’s audit? (Points: 3)
Mare engages another firm to perform the fieldwork, and Burrow is limited to reviewing the
workpapers and issuing the audit report.
Mare sets up a 2-year payment plan with Burrow to settle the unpaid fee balance.
Mare gives Burrow an 18-month note payable for the full amount of the past due fees before
Burrow begins the audit.
Mare commits to pay the past due fee in full before the audit report is issued.
Chapter 2
7. (TCO 3) Independence in auditing means (Points: 3)
remaining aloof from a client.
taking an unbaised and objective viewpoint.
not being financially dependent on a client.
being an advocate for a client.
Chapter 4