CCA CCA Ethics & Corporate Governance

Question 1

Under the AICPA Code of Professional Conduct, which fundamental principle requires a CPA to be straightforward and honest in professional and business relationships?

Accepted Answer

Integrity

Answer

Objectivity

Answer

Due care

Answer

Confidentiality

Question 2

What is the primary role of a board of directors' audit committee?

Accepted Answer

To oversee the financial reporting process, internal controls, and the external auditor relationship

Answer

To manage day-to-day financial operations

Answer

To set executive compensation packages

Answer

To approve capital expenditure budgets

Question 3

Which of the following best describes a conflict of interest for a corporate accountant?

Accepted Answer

Having a personal financial stake in decisions that should be made objectively for the employer

Answer

Preparing financial statements for a client in a different industry

Answer

Disagreeing with management's accounting estimates

Answer

Working overtime during the year-end close

Question 4

The Sarbanes-Oxley Act (SOX) Section 302 requires corporate officers to:

Accepted Answer

Certify the accuracy of financial statements and effectiveness of disclosure controls

Answer

Register all securities with the SEC within 30 days of issuance

Answer

Establish a whistleblower hotline managed by external counsel

Answer

Rotate external auditors every five years

Question 5

What does the concept of 'fiduciary duty' mean for a corporate officer?

Accepted Answer

The legal and ethical obligation to act in the best interests of the company and its shareholders

Answer

The obligation to maximize personal compensation through equity grants

Answer

The duty to file all tax returns on time

Answer

The responsibility to comply only with federal regulations

Question 6

Which of the following is an example of earnings management crossing into financial statement fraud?

Accepted Answer

Recording fictitious revenues to meet analyst earnings expectations

Answer

Timing a large sale to close before quarter-end

Answer

Changing from FIFO to weighted-average inventory costing with proper disclosure

Answer

Accelerating capital expenditures for tax benefits