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4.Refer to the following scenario to answer the question

Pizza GO a mid-sized family owned but growing business has a $1 million lawsuit pending due to an angry customer consuming spoiled pizza. It is year end and financial statements are being prepared.GAAP Loss must be accrued if loss is probable. Probable meaning more likely than not a loss will occur. (ie Odds of loss over 50%.) Several investors have expressed interest in injecting millions in expansion capital. The CEO very anxious to obtain the funding, as it may make or break the company. He needs to present the financial statements to Investors in a week.

You are an auditor for the CPA firm that will be auditing Pizza Go. Your Father is the CEO of Pizza Go. What is the reason why you cannot accept the assignment?

It is a violation of the due care principle.

It is a violation of the public interest principle.

It is a violation because the scope and nature of services is not consistent with standards.

It is a violation of the objectivity and independence principle.

5. What does the term accounting ethics most closely related to ?

A.Complying with laws and regulations at every given situation

B. Individual behavior based on what is morally right and wrong

C. Thinking about ways to do good vs bad

D. Determining what is acceptable to stakeholders vs your own thoughts.

6.The following are examples of financial statement fraud

I Inflating revenue

II Employee physically absconding with cash from the bank vault

III Underreporting debt

IV Changing the vendor master file without authorization

A.I and II

B. I, II and IV

C. I and III

D. III and IV

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