CPA CPA Ethics & Professional Responsibility

Question 1

Under the AICPA Code of Professional Conduct, which principle requires a CPA to be straightforward and honest in all professional relationships?

Accepted Answer

Integrity

Answer

Objectivity

Answer

Due care

Answer

Scope and nature of services

Question 2

A CPA discovers during an audit that a client has committed an immaterial illegal act. What is the CPA's primary obligation?

Accepted Answer

Inform the client's management or those charged with governance

Answer

Immediately report to the SEC

Answer

Withdraw from the engagement without notification

Answer

Issue an adverse opinion

Question 3

Which threat to CPA independence occurs when a CPA audits their own firm's previous work?

Accepted Answer

Self-review threat

Answer

Advocacy threat

Answer

Familiarity threat

Answer

Intimidation threat

Question 4

Under the AICPA rules, which of the following would NOT impair auditor independence?

Accepted Answer

Performing bookkeeping services for a non-attest client

Answer

Owning a direct financial interest in a client

Answer

Having an overdue fee from a prior year audit

Answer

Serving on the board of directors of an attest client

Question 5

The concept of 'due professional care' in auditing requires auditors to:

Accepted Answer

Exercise the skill and diligence of a competent auditor

Answer

Guarantee the detection of all fraud

Answer

Provide absolute assurance on financial statements

Answer

Complete audits within a fixed time frame

Question 6

Which AICPA standard requires CPAs to maintain confidentiality of client information obtained during a professional engagement?

Accepted Answer

Rule 301 — Confidential Client Information

Answer

Rule 102 — Integrity and Objectivity

Answer

Rule 201 — General Standards

Answer

Rule 501 — Acts Discreditable