CGA Ethics & Professional Standards Flashcards

Which fundamental principle of the CPA/CGA Code of Professional Conduct requires members to be straightforward and honest in all professional and business relationships?

Answer: Integrity

Integrity requires CPAs to be honest and straightforward, avoiding any actions that discredit the profession.

A CGA discovers during an audit that a client is engaged in tax fraud. Under ethical standards, the CGA should first:

Answer: Discuss the matter with the client and consider resigning if unresolved

Professional standards require the accountant to first communicate with client management, and if unresolved, consider resignation to avoid association with the misconduct.

The concept of 'independence in appearance' for an auditor means:

Answer: The auditor avoids any situation that could cause a reasonable observer to doubt objectivity

Independence in appearance means the auditor avoids circumstances that might lead an informed third party to question their objectivity, even if actual independence exists.

Which of the following is NOT a threat to a CGA's independence?

Answer: Technical competence threat

The recognized threats to independence are self-interest, self-review, advocacy, familiarity, and intimidation; technical competence is not categorized as a threat to independence.

What does the principle of professional competence and due care require of a CGA?

Answer: Maintaining technical knowledge and acting diligently in providing professional services

Professional competence and due care requires CGAs to maintain current knowledge, act diligently, and apply relevant standards carefully.

Client confidentiality under professional standards generally permits disclosure without client consent when:

Answer: Required by a court order or legal/professional duty

Confidentiality may be overridden when disclosure is required by law, court order, or a professional right or duty to disclose.