CGA CGA Ethics & Professional Standards 2

Question 1

Which of the following scenarios represents a self-review threat to auditor independence?

Accepted Answer

The auditor's firm prepared the financial statements it is now auditing

Answer

A self-review threat occurs when the auditor must evaluate work previously done by themselves or their firm, impairing objectivity.

Question 2

The 'threats and safeguards' approach in the CPA Code of Ethics requires a member to:

Accepted Answer

Identify threats to compliance, evaluate their significance, and apply safeguards

Answer

The conceptual framework requires identifying threats, assessing their significance, and applying appropriate safeguards to reduce them to acceptable levels.

Question 3

An accountant faces an ethical conflict when:

Accepted Answer

Employer pressure conflicts with compliance with professional standards

Answer

An ethical conflict arises when pressure from an employer or client conflicts with the accountant's obligation to comply with professional and ethical standards.

Question 4

Which body is primarily responsible for setting ethical standards for CPAs/CGAs in the United States?

Accepted Answer

AICPA

Answer

The American Institute of Certified Public Accountants (AICPA) issues the Code of Professional Conduct that governs CPA ethics in the US.

Question 5

A CGA who advertises services in a false or misleading manner violates which fundamental principle?

Accepted Answer

Professional behavior

Answer

Professional behavior requires CGAs to comply with relevant laws and avoid any action that discredits the profession, including false advertising.

(CGA) Certified General Accountant Practice Test

(CGA) Certified General Accountant Practice Test

CGA CGA Ethics & Professional Standards 2