AAT L2 Professional Ethics in Accounting 2

Question 1

Under the UK's Proceeds of Crime Act 2002, money laundering is best described as:

Accepted Answer

The process by which proceeds of crime are disguised to appear as legitimately obtained funds

Answer

Spending money on illegal goods or services

Answer

Failing to pay taxes on time

Answer

Overcharging clients for accounting services

Question 2

What is a Suspicious Activity Report (SAR) and to whom is it submitted in the UK?

Accepted Answer

A report submitted to the National Crime Agency (NCA) when there is knowledge or suspicion of money laundering or terrorist financing

Answer

A report about a client complaint, submitted to the AAT

Answer

A report to HMRC about suspected tax avoidance

Answer

A report about health and safety concerns submitted to the HSE

Question 3

Which of the following would constitute the criminal offence of 'tipping off' in relation to money laundering?

Accepted Answer

Disclosing to a client that a Suspicious Activity Report has been filed about them, in a way that could prejudice a money laundering investigation

Answer

Telling a colleague about a client's accounting errors

Answer

Reporting a colleague's misconduct to a line manager

Answer

Sharing information about a client's late payments with a credit agency

Question 4

Which of the following is an example of a safeguard that could reduce threats to fundamental ethical principles?

Accepted Answer

Independent review of work completed by another suitably qualified person

Answer

Completing work more quickly to reduce pressure

Answer

Refusing to work with any clients who present ethical difficulties

Answer

Reducing fees charged to clients to maintain good relationships

Question 5

An 'intimidation threat' to fundamental ethical principles occurs when:

Accepted Answer

An accountant is deterred from acting objectively due to actual or perceived threats from another person

Answer

An accountant is given more work than they can complete

Answer

A client refuses to pay an invoice on time

Answer

A manager requests that an accountant works late on a deadline

Question 6

Which of the following best describes an 'advocacy threat' in professional ethics?

Accepted Answer

When an accountant promotes a client's position so strongly that their own objectivity becomes compromised

Answer

An accountant recommending accounting software to a client

Answer

When an accountant provides tax advice to a client

Answer

When an accountant prepares a client's financial statements

Question 7

Which organisation is primarily responsible for regulating AAT members' professional conduct in the UK?

Accepted Answer

The Association of Accounting Technicians (AAT)

Answer

HM Revenue & Customs (HMRC)

Answer

The Financial Conduct Authority (FCA)

Answer

Companies House