CB Professional Ethics & Standards 3

Question 1

When a bookkeeper realizes they have made a material error in a client's financial records, ethical standards require them to:

Accepted Answer

Disclose the error to the client and correct it promptly

Answer

Transparency and integrity require that material errors be disclosed to the client and corrected as soon as they are discovered.

Question 2

A bookkeeper is asked to prepare financial statements using an accounting method that does not comply with GAAP. The client argues it better reflects economic reality. What should the bookkeeper do?

Accepted Answer

Refuse and explain that adherence to GAAP is a professional obligation

Answer

Professional standards require bookkeepers to follow GAAP; departing from GAAP without proper disclosure and authority is unethical.

Question 3

Which of the following scenarios represents a SELF-INTEREST threat to a bookkeeper's objectivity?

Accepted Answer

Having a financial stake in a client's business

Answer

Holding a financial interest in a client creates a self-interest threat because the bookkeeper may be motivated to favor outcomes that benefit their investment.

Question 4

AIPB's Code of Ethics applies to Certified Bookkeepers in which situations?

Accepted Answer

In all professional activities, whether employed or self-employed

Answer

The AIPB Code of Ethics governs all professional activities of Certified Bookkeepers regardless of their employment setting or engagement structure.

Question 5

A bookkeeper suspects that a coworker is embezzling small amounts from petty cash. What is the most ethical course of action?

Accepted Answer

Document observations and report suspicions to a supervisor or appropriate authority

Answer

Ethical standards require reporting suspected fraud through proper internal channels, regardless of the dollar amount involved.

(CB) Certified Bookkeeper Practice Test

(CB) Certified Bookkeeper Practice Test

CB Professional Ethics & Standards 3