Professional Standards and Ethics Flashcards
7 cards from real PCC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Professional Standards and Ethics flashcards as text
A consultant discovers mid-engagement that a close relative holds a significant equity stake in the client's main competitor. What is the most appropriate first step?
Answer: Disclose the relationship to the client promptly and let the client decide whether to proceed
Professional codes require prompt disclosure of potential conflicts of interest so the client can make an informed decision.
A client asks a consultant to state in a report that a vendor's system 'failed testing' when results were actually inconclusive. What should the consultant do?
Answer: Report the results accurately as inconclusive and explain the limitations
Consultants must not misrepresent facts or findings, regardless of client pressure.
Which fee arrangement is most likely to raise an objectivity concern in an engagement to recommend whether a client should buy a specific company?
Answer: A fee contingent on the acquisition being completed
A contingent fee tied to the recommended outcome gives the consultant a financial interest in a particular conclusion.
A former client's confidential pricing data would be very useful for a new client in the same industry. What does professional ethics require?
Answer: Never use or disclose the former client's confidential information without authorization
Confidentiality obligations continue after an engagement ends and require client authorization for any disclosure.
A consultant is asked to take on an engagement requiring specialized tax expertise the consultant lacks. What is the most ethical response?
Answer: Decline, or bring in qualified expertise with the client's knowledge
Consultants should accept only work they are competent to perform or can competently staff.
Which practice best demonstrates appropriate independence in a consulting engagement?
Answer: Basing recommendations on evidence even when they contradict management's preferred outcome
Independence means forming and communicating judgments free of undue influence.
A vendor offers a consultant a referral commission for recommending its software to a client. What should the consultant do if considering the arrangement?
Answer: Disclose it to the client in advance and obtain consent, or decline it
Undisclosed third-party compensation is a conflict of interest that ethics codes prohibit.
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