Regulatory Frameworks & Compliance Flashcards
7 cards from real Certified Public Accountant practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Regulatory Frameworks & Compliance flashcards as text
Under Circular 230, which of the following best describes a 'covered opinion'?
Answer: Written advice concerning a listed transaction or a principal purpose transaction
A covered opinion under Circular 230 includes written advice on listed transactions or transactions with tax avoidance as a principal purpose.
Which federal agency enforces the Employee Retirement Income Security Act (ERISA) for private pension plans?
Answer: Department of Labor and IRS (jointly)
ERISA enforcement is shared primarily between the Department of Labor (plan administration) and the IRS (tax qualification), with the PBGC covering plan termination insurance.
Under the Foreign Corrupt Practices Act (FCPA), which of the following is NOT considered a foreign official for purposes of the anti-bribery provisions?
Answer: A private sector business competitor in a foreign country
The FCPA's anti-bribery provisions apply to foreign officials, government employees, and political party officials, but not to private sector individuals.
Which GAAS standard requires auditors to obtain an understanding of the entity and its environment, including its internal control?
Answer: AU-C Section 315
AU-C Section 315 requires the auditor to identify and assess risks of material misstatement through understanding the entity and its environment.
A CPA firm that audits an SEC registrant must rotate the lead audit engagement partner every:
Answer: 5 years
Under Sarbanes-Oxley and SEC rules, the lead audit partner must rotate off an engagement after five consecutive years of service.
The Gramm-Leach-Bliley Act (GLBA) primarily requires financial institutions to:
Answer: Protect and disclose their privacy practices for nonpublic customer information
GLBA requires financial institutions to protect customers' nonpublic personal information and provide privacy notices explaining their data-sharing practices.
Under AICPA Statements on Standards for Tax Services (SSTS), a CPA may take a tax return position that has:
Answer: A realistic possibility of being sustained on the merits (1-in-3 chance)
Under SSTS No. 1, a CPA may recommend a tax position if it has a realistic possibility of being sustained on its merits, roughly a 1-in-3 chance.