Certified Public Accountant Ethics & Professional Responsibilities

Question 1

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

Accepted Answer

Integrity

Answer

Objectivity

Answer

Due care

Answer

Independence

Question 2

A CPA firm provides both audit and bookkeeping services to the same client. Which AICPA independence threat does this situation most likely create?

Accepted Answer

Self-review threat

Answer

Advocacy threat

Answer

Familiarity threat

Answer

Intimidation threat

Question 3

Under the AICPA Code, which rule generally prohibits a CPA in public practice from disclosing confidential client information without consent?

Accepted Answer

Rule 301 - Confidential Client Information

Answer

Rule 101 - Independence

Answer

Rule 102 - Integrity and Objectivity

Answer

Rule 501 - Acts Discreditable

Question 4

What is the AICPA's 'Independence in appearance' concept designed to protect?

Accepted Answer

Public confidence in the audit function

Answer

Auditor's legal liability

Answer

Client's trade secrets

Answer

CPA's professional license

Question 5

A CPA discovers a material error in a previously issued tax return. What is the CPA's primary obligation under AICPA standards?

Accepted Answer

Inform the client and recommend correction

Answer

Immediately notify the IRS without telling the client

Answer

Withdraw from the engagement only

Answer

Ignore the error if it is not the CPA's fault

Question 6

Which body has the authority to establish ethical standards for CPAs who are members of the AICPA?

Accepted Answer

AICPA Professional Ethics Executive Committee (PEEC)

Answer

Securities and Exchange Commission (SEC)

Answer

Public Company Accounting Oversight Board (PCAOB)

Answer

Financial Accounting Standards Board (FASB)