CPA CPA Ethics & Professional Responsibilities 1

Question 1

Which AICPA Code of Professional Conduct principle requires CPAs to act in a manner that will serve the public interest?

Accepted Answer

Public Interest

Answer

The Public Interest principle requires CPAs to act in a way that serves clients, employers, the public, and the profession.

Question 2

Under the AICPA independence rules, which of the following would impair a CPA's independence when performing an audit?

Accepted Answer

Owning a direct financial interest in the client

Answer

Any direct financial interest in an audit client impairs independence regardless of materiality.

Question 3

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

Accepted Answer

Inform the client and recommend corrective action

Answer

The CPA must promptly inform the client of the error and recommend filing an amended return, but cannot act without client consent.

Question 4

Which of the following is NOT a threat to CPA independence identified by the AICPA?

Accepted Answer

Competence threat

Answer

The AICPA identifies self-interest, self-review, advocacy, familiarity, and intimidation as the five main threats to independence; competence is not one of them.

Question 5

The AICPA's concept of 'due professional care' requires a CPA to perform services with the:

Accepted Answer

Competence and diligence of a reasonable CPA

Answer

Due professional care requires the competence and diligence that a reasonable and prudent CPA would exercise in similar circumstances.

(CPA) Certified Practicing Accountant Practice Test

(CPA) Certified Practicing Accountant Practice Test

CPA CPA Ethics & Professional Responsibilities 1