AAT L3 Ethics for Accountants 2

Question 1

Under the AAT's ethical guidance, which of the following should be reported to the firm's Money Laundering Reporting Officer (MLRO)?

Accepted Answer

A client whose transactions suggest the proceeds of tax evasion

Answer

A client who consistently pays invoices late

Answer

A client who disagrees with accounting treatment

Answer

A client who has changed their bank account

Question 2

Tipping off under anti-money laundering legislation means:

Accepted Answer

Informing a client or suspect that a suspicious activity report has been filed or an investigation is underway

Answer

Warning a manager that a junior has made an error

Answer

Disclosing a client's tax affairs to a third party

Answer

Reporting a colleague for unethical behaviour

Question 3

Confidentiality requires an accountant NOT to use client information for:

Accepted Answer

Personal advantage or the advantage of a third party

Answer

Preparing the client's financial statements

Answer

Completing the client's tax return

Answer

Answering HMRC's legitimate enquiries

Question 4

Which of the following describes the 'reasonable and informed third party' test?

Accepted Answer

Considering whether a knowledgeable, impartial person would conclude the accountant acted appropriately

Answer

Asking the most senior partner to review the decision

Answer

Checking whether the action is profitable

Answer

Asking a colleague who is familiar with the client

Question 5

Under the AAT Code, which action is appropriate if an accountant's employer asks them to do something unethical?

Accepted Answer

Discuss the concern with a senior colleague or mentor, and refuse to carry out the unethical action

Answer

Comply with all employer instructions without question

Answer

Immediately resign without further discussion

Answer

Report the employer to the police straightaway

Question 6

Professional competence requires accountants to:

Accepted Answer

Maintain up-to-date knowledge through continuing professional development (CPD)

Answer

Claim expertise in all areas of accountancy

Answer

Only accept work they are already fully competent to perform without any further learning

Answer

Limit their practice to their original qualification subject areas for life