B. Acy Bachelor of Accountancy Ethics and Professional Responsibility 1

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

Objectivity requires CPAs to be impartial, intellectually honest, and free from conflicts that could compromise professional judgment.

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

SOX requires audit committees to include independent directors and at least one financial expert to provide effective oversight.

Question 3

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

Accepted Answer

Maintain a questioning mind and critically assess audit evidence

Answer

Professional skepticism means neither assuming management is dishonest nor assuming unquestioned honesty, but critically evaluating evidence.

Question 4

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

Accepted Answer

AICPA and state CPA societies

Answer

The AICPA issues the Code of Professional Conduct, and individual state CPA societies adopt and enforce ethical rules for licensees.

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

CPAs may disclose confidential client information when compelled by a court order, subpoena, or other legal process.

B. Acy Bachelor of Accountancy Practice Test