Ethics, Governance & Business Law Flashcards
7 cards from real AICPA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Ethics, Governance & Business Law flashcards as text
Under the AICPA's conceptual framework, a 'safeguard' implemented to address an identified threat to independence is designed to:
Answer: Eliminate the threat or reduce it to an acceptable level
Safeguards are actions or measures that eliminate threats or reduce them to an acceptable level so that compliance with the fundamental principles is not compromised.
Under partnership law, which of the following is a characteristic of a general partnership that distinguishes it from a limited partnership?
Answer: All partners have equal rights to manage the business
In a general partnership, every partner has equal rights in the management and conduct of partnership business, unlike limited partnerships where limited partners cannot participate in management.
The PCAOB's auditing standards apply primarily to auditors of:
Answer: Companies whose securities are publicly traded or registered with the SEC
The PCAOB regulates and sets auditing standards for registered public accounting firms that audit public companies (issuers) and SEC-registered broker-dealers.
Under the AICPA Code of Professional Conduct, which principle requires CPAs to be straightforward and honest in all professional and business relationships?
Answer: Integrity
The integrity principle requires CPAs to be straightforward and honest, not knowingly misrepresent facts or subordinate their judgment to others.
A corporation's articles of incorporation are best described as:
Answer: The document filed with the state to legally create the corporation
Articles of incorporation (also called a corporate charter) are filed with the state authority to legally form the corporation and contain basic organizational information.
Under employment law, which federal statute prohibits discrimination based on race, color, religion, sex, or national origin in employment decisions?
Answer: Title VII of the Civil Rights Act of 1964
Title VII of the Civil Rights Act of 1964 prohibits employment discrimination based on race, color, religion, sex, or national origin by employers with 15 or more employees.
Which bankruptcy chapter allows a business to reorganize and continue operating while repaying creditors under a court-approved plan?
Answer: Chapter 11
Chapter 11 bankruptcy allows businesses (and some individuals) to reorganize their finances and continue operations while developing a plan to repay creditors.