Compliance and Auditing Ethics and Professional Standards

Question 1

Which organization publishes the Code of Professional Conduct governing the ethical behavior of Certified Public Accountants (CPAs) in the United States?

Accepted Answer

AICPA

Answer

The American Institute of CPAs (AICPA) publishes the Code of Professional Conduct that establishes the ethical standards for CPAs in the United States.

Question 2

The confidentiality principle in professional ethics requires auditors to:

Accepted Answer

Not disclose information acquired during professional services to third parties without proper authority

Answer

Confidentiality requires professionals not to disclose information acquired during professional services to third parties without proper authorization, unless there is a legal or professional right or duty to disclose.

Question 3

Which ethical principle requires auditors to perform duties with competence, diligence, and care?

Accepted Answer

Professional competence and due care

Answer

Professional competence and due care requires auditors to maintain professional knowledge and skill at the level needed to ensure clients receive competent professional service.

Question 4

When an auditor holds a direct financial interest in a client's company, this creates a threat to which core principle?

Accepted Answer

Independence

Answer

A financial interest in a client creates a self-interest threat to independence, as the auditor may be influenced by potential financial gain when forming their professional opinion.

Question 5

The IIA's International Standards for the Professional Practice of Internal Auditing require internal auditors to maintain which combination of attributes?

Accepted Answer

Independence and objectivity in their work

Answer

The IIA's Standards require internal auditors to be independent from the activities they audit and to maintain an objective, impartial mindset in all engagements.

Compliance and Auditing Practice Test

Compliance and Auditing Practice Test

Compliance and Auditing Ethics and Professional Standards