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

Money laundering involves disguising the criminal origins of money to make it appear to have come from a legitimate source.

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 SAR must be submitted to the National Crime Agency when an accountant knows or suspects that money laundering or terrorist financing is occurring.

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

Tipping off is a criminal offence that involves disclosing to a person under investigation that a SAR has been submitted, as this could prejudice the investigation.

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

Safeguards such as independent review procedures reduce the risk that threats to ethical principles will compromise the quality or integrity of an accountant's work.

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 intimidation threat arises when threats, whether real or perceived, cause an accountant to act in a biased or non-objective manner.

AAT Level 2 Practice Test

AAT Level 2 Practice Test

AAT L2 Professional Ethics in Accounting 2