CPA CPA Ethics & Professional Responsibilities 2

Question 1

Under Circular 230, which practitioner action is considered a 'best practice'?

Accepted Answer

Communicating clearly with clients about the terms of the engagement

Answer

Circular 230 best practices include clearly communicating engagement terms, procedures, and limitations to clients.

Question 2

Which body has the authority to suspend or disbar a CPA from practicing before the IRS?

Accepted Answer

Office of Professional Responsibility (OPR)

Answer

The IRS Office of Professional Responsibility (OPR) enforces Circular 230 and has authority to sanction, suspend, or disbar tax practitioners.

Question 3

A CPA who provides investment advisory services must register with:

Accepted Answer

The SEC or appropriate state securities regulator as an investment adviser

Answer

CPAs providing investment advisory services for compensation must register under the Investment Advisers Act with the SEC or state securities regulators.

Question 4

Under the AICPA Code of Professional Conduct, a CPA must maintain client confidentiality EXCEPT when:

Accepted Answer

Responding to a peer review

Answer

CPAs are required to cooperate with peer review processes, which is a recognized exception to the general client confidentiality rule.

Question 5

Which statement best describes a CPA's responsibility when a client asks them to act as an expert witness?

Accepted Answer

The CPA must provide objective testimony based on professional expertise

Answer

When serving as an expert witness, a CPA must provide objective, unbiased testimony based on professional expertise rather than advocate for the client.

(CPA) Certified Practicing Accountant Practice Test

(CPA) Certified Practicing Accountant Practice Test

CPA CPA Ethics & Professional Responsibilities 2