AAT L2 Professional Ethics in Accounting 5

Question 1

An accountant realises they have made a material error in a client's VAT return that has already been submitted. What should they do?

Accepted Answer

Inform the client promptly and advise on correcting the return with HMRC

Answer

Professional integrity requires the accountant to inform the client about the error and advise on the appropriate corrective action with HMRC.

Question 2

Which of the following scenarios represents a 'familiarity threat' to ethical behaviour?

Accepted Answer

Being too closely associated with a long-standing client and overlooking errors out of loyalty

Answer

A familiarity threat arises when an accountant becomes too sympathetic to a client's interests due to a close or long-standing relationship.

Question 3

What is the purpose of 'customer due diligence' (CDD) in the context of anti-money laundering regulations?

Accepted Answer

To verify a client's identity and assess the risk that they may be involved in money laundering

Answer

CDD involves verifying the identity of clients and understanding the nature of their business to assess money laundering risk.

Question 4

An AAT student is pressured by their employer to process a transaction they believe is improper. This is an example of which type of threat?

Accepted Answer

Intimidation threat

Answer

An intimidation threat occurs when a member feels coerced or pressured by a client, employer or other party to act improperly.

Question 5

When is it acceptable for an AAT member to disclose confidential client information without the client's consent?

Accepted Answer

When required to do so by law, such as in response to a court order

Answer

Confidential information can be disclosed without consent when there is a legal or regulatory duty to do so, such as a court order or statutory requirement.

AAT Level 2 Practice Test

AAT Level 2 Practice Test

AAT L2 Professional Ethics in Accounting 5