Ethics for Accountants Flashcards
6 cards from real AAT L3 practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Ethics for Accountants flashcards as text
Under the AAT's ethical guidance, which of the following should be reported to the firm's Money Laundering Reporting Officer (MLRO)?
Answer: A client whose transactions suggest the proceeds of tax evasion
Tax evasion is a predicate offence under POCA 2002; transactions suggesting the proceeds of tax evasion (a criminal offence) must be reported internally to the MLRO, who decides whether to file a SAR with the NCA.
Tipping off under anti-money laundering legislation means:
Answer: Informing a client or suspect that a suspicious activity report has been filed or an investigation is underway
Tipping off is a criminal offence under POCA 2002: telling someone that a SAR has been filed or that law enforcement is investigating could prejudice the investigation and is strictly prohibited.
Confidentiality requires an accountant NOT to use client information for:
Answer: Personal advantage or the advantage of a third party
Confidentiality prohibits an accountant from using client information for their own personal gain or for the benefit of third parties; the information was provided for specific professional purposes only.
Which of the following describes the 'reasonable and informed third party' test?
Answer: Considering whether a knowledgeable, impartial person would conclude the accountant acted appropriately
The RITP test asks: would a reasonable person, fully informed of all relevant facts and circumstances, conclude that the accountant has complied with the fundamental principles? It is an objective ethical check.
Under the AAT Code, which action is appropriate if an accountant's employer asks them to do something unethical?
Answer: Discuss the concern with a senior colleague or mentor, and refuse to carry out the unethical action
The accountant should first discuss the ethical concern, seeking guidance from a senior colleague or the AAT. If the issue cannot be resolved, they should refuse the instruction; in serious cases, resignation or further escalation may be necessary.
Professional competence requires accountants to:
Answer: Maintain up-to-date knowledge through continuing professional development (CPD)
Professional competence is maintained through CPD — continuing education and training to keep knowledge and skills current with evolving technical standards, legislation, and professional requirements.