ACC 499 Week 11 Final Exam Part 2 The AICPA Principles of Professional Conduct include which of the following? Which one of the following is an example of a conflict of interest for a CPA? Which of the following represents a situation in which an auditor is independent of the client? In which of the following situations would a CPA not be considered independent? The ethical framework derived from utilitarianism and rights theories indicates all of the following steps except Which of the following is included in the AICPA Code of Professional Conduct? Normally the auditor is not permitted to divulge confidential information obtained from a client. Which of the following situations would be a violation of this requirement? A member of the AICPA must safeguard the confidentiality of client information. Auditors, however, must disclose information to non-clients for the following reasons except to: Which of the following is a preventive control? An accounting system that maintains an adequate audit trail is implementing which internal control procedure? When duties cannot be segregated, the most important internal control procedure is The concept of reasonable assurance suggests that The most cost-effective type of internal control is The fundamental difference between internal and external auditing is that Substantive tests include The decision to extend credit beyond the normal credit limit is an example of Control risk is Which of the following represent temporary book-tax differences? North, Inc., earns book net income before tax of $500,000 in 2010. In computing its book income, North deducts $50,000 more in warranty expense for book purposes than allowed for tax purposes. North has no other temporary or permanent differences. Assuming the U.S. tax rate is 35% and no valuation allowance is required, what is North’s deferred income tax asset reported on its financial statements for 2010? How are deferred tax liabilities and assets categorized on the balance sheet? Hot, Inc.’s primary competitor is Cold, Inc. When comparing relative deferred tax asset and liability accounts with Cold, which of the following should Hot do? Paint, Inc., a domestic corporation, owns 100% of Blue, Ltd., a foreign corporation and Yellow, Inc., a domestic corporation. Paint also owns 40% of Green, Inc., a domestic corporation. Paint receives no distributions from any of these corporations. Which of these entities’ net income are included in Paint’s income statement for current year financial reporting purposes? Nocera, Inc. earns book net income before tax of $600,000 in 2010. Nocera acquires a depreciable asset in 2010 and first year tax depreciation exceeds book depreciation by $120,000. Nocera has no other temporary or permanent differences. Assuming the U.S. tax rate is 35%, what is Nocera’s total income tax expense reported on its financial statements for 2010? Which of the following items are not included in the income tax note for a publicly traded company? Larson, Inc., hopes to report a total book tax expense of $160,000 in the current year. This $160,000 expense consists of $240,000 in current tax expense and an $80,000 tax benefit related to the expected future use of an NOL by Larson. If the auditors determine that a valuation allowance of $30,000 must be placed against Larson’s deferred tax assets, what is Larson’s total book tax expense?