B. Acy Bachelor of Accountancy Ethics and Professional Responsibility

Question 1

The AICPA Code of Professional Conduct's principle of objectivity requires CPAs to:

Accepted Answer

Be free from conflicts of interest and not subordinate judgment to others

Answer

Prioritize client interests over all others

Answer

Avoid all forms of advertising

Answer

Accept all client engagements offered

Question 2

Under the Sarbanes-Oxley Act, the audit committee of a public company must:

Accepted Answer

Include at least one financial expert and consist of independent directors

Answer

Be composed entirely of company executives

Answer

Be appointed by the external auditors

Answer

Prepare the company's financial statements

Question 3

The ethical concept of 'professional skepticism' requires auditors to:

Accepted Answer

Maintain a questioning mind and critically assess audit evidence

Answer

Assume all management representations are false

Answer

Verify every single transaction

Answer

Avoid working with management on financial matters

Question 4

Which body issues ethical standards for CPAs in the United States?

Accepted Answer

AICPA and state CPA societies

Answer

SEC

Answer

FASB

Answer

PCAOB only

Question 5

Confidentiality under the AICPA Code prohibits CPAs from disclosing client information EXCEPT when:

Accepted Answer

Required by a validly issued subpoena or court order

Answer

A competitor requests it

Answer

The client is publicly traded

Answer

Another CPA asks as a courtesy

Question 6

The Foreign Corrupt Practices Act (FCPA) prohibits US companies from:

Accepted Answer

Bribing foreign government officials to obtain or retain business

Answer

Trading with foreign competitors

Answer

Hiring foreign nationals as employees

Answer

Recording transactions in foreign currencies