CPA ETHICS PRACTICE EXAM QUESTIONS WITH ANSWERS
2025/2026 GRADED A+
A distinguishing mark of a profession is:
(a) Acceptance of its responsibility to the public.
(b) The esteem with which it is held by the public.
(c) Its ability to influence legislation. - (a) is correct. As stated in Article II, the
distinguishing mark of a profession is acceptance of its responsibility to the public.
(b) The esteem by which it is held by the public
will come when it shows its responsibility to the public.
(c) Influencing legislation may be important to the profession but it is not the
distinguishing
mark of a profession.
The AICPA Code of Professional Conduct provides
guidance and rules for:
(a) Only members in public practice.
(b) All members.
(c) Only members engaged in rendering attestation
services. - (b) is correct. The Code of Professional Conduct
provides rules for all members, As stated in the Articles, section Composition, the
membership
adopted the code to provide guidance and rules for all members-those in public
practice, in
industry, in government and in education.
Due care requires a member to:
(a) Perform work for clients at the lowest cost.
(b) Perform work for the clients with competence
and diligence.
(c) Complete each year a specified number of
hours of Continuing Professional Education
courses. - (b) is correct. Article V requires a member to per-form his professional work
with competence and diligence.
(a) The Principles do not address the subject of fees or
(c) Continuing Professional Education.
Jones & Barnes, a public accounting firm, has offices
in Minneapolis, Chicago and 10 other cities. The firm 's
executive office and the managing partner are in Chicago.
Each office does all the work and issues the audit reports
for the clients of that office. Black & Co. is an audit client
of the Minneapolis office.
State whether in the following situations the individual
would be a "covered member" with respect to the 2001
calendar year audit of Black & Co.
,Gilbert , a tax partner in the Chicago office
(a) is a covered member.
(b) is not a covered member. - (b) is correct. (Covered member (d)) includes
partners in the office where the attest engagement
partner is located. Since Minneapolis does all the
work for this client the engagement partner has to
be in Minneapolis. Gilbert is in the Chicago office
and therefore he is not a covered member.
Jones & Barnes, a public accounting firm, has offices
in Minneapolis, Chicago and 10 other cities. The firm 's
executive office and the managing partner are in Chicago.
Each office does all the work and issues the audit reports
for the clients of that office. Black & Co. is an audit client
of the Minneapolis office.
State whether in the following situations the individual
would be a "covered member" with respect to the 2001
calendar year audit of Black & Co.
Jacobs, an audit manager in the Minneapolis office,
who does no work on the Black & Co. engagement.
(a) is a covered member.
(b) is not a covered member. - (b) is correct. (Covered member (a)), includes all
people that work on the attest engagement team.
Thus professional staff that work on the audit are
covered members. Since Jacobs does no work on
the Black & Co. engagement, he is not a covered
member. The fact that he is a manager has no bearing on the answer.
Jones & Barnes, a public accounting firm, has offices
in Minneapolis, Chicago and 10 other cities. The firm 's
executive office and the managing partner are in Chicago.
Each office does all the work and issues the audit reports
for the clients of that office. Black & Co. is an audit client
of the Minneapolis office.
State whether in the following situations the individual
would be a "covered member" with respect to the 2001
calendar year audit of Black & Co.
Larson, a consulting services partner, in the Minneapolis
office who has not done any work for Black & Co.
(a) is a covered member
(b) is not a covered member - (a) is correct. (Covered member (d)) includes all
partners in the office where the lead attest engagement partner works. Since
Minneapolis does all the work for this client, the lead attest engagement partner has to
,be in Minneapolis. Larson is a partner in the Minneapolis office, and therefore he is a
covered member even though he never works on the Black & Co. engagement
Jones & Barnes, a public accounting firm, has offices
in Minneapolis, Chicago and 10 other cities. The firm 's
executive office and the managing partner are in Chicago.
Each office does all the work and issues the audit reports
for the clients of that office. Black & Co. is an audit client
of the Minneapolis office.
State whether in the following situations the individual
would be a "covered member" with respect to the 2001
calendar year audit of Black & Co.
Olson, a professional staff person below the rank of
manager, who worked for two weeks in 2001 on a
non attest consulting services engagement for Black
&Co.
(a) is a covered member
(b) is not a covered member - (b) is correct. (Covered member (c)) holds that
partners or managers who provide ten hours or more of non-attest services to a client
within the year are covered members. Olson however is not a partner or manager, and
thus is not a covered member even though he did non-attest services for Black & Co.
Jones & Barnes, a public accounting firm, has offices
in Minneapolis, Chicago and 10 other cities. The firm 's
executive office and the managing partner are in Chicago.
Each office does all the work and issues the audit reports
for the clients of that office. Black & Co. is an audit client
of the Minneapolis office.
State whether in the following situations the individual
would be a "covered member" with respect to the 2001
calendar year audit of Black & Co.
Corey, secretary to the Minneapolis office managing
partner,
(a) is a covered member
(b) is not a covered member - (b) is correct (Attest engagement team) does not
include those performing routine clerical functions. Thus (Covered member (b)) does
not apply to nonprofessional people unless they are in a position where they can
influence the attest engagement. Corey, as a secretary, is thus not a covered member.
Porter is a partner in White & Co., CPAs. State whether in
the following situations the person would be classified as
a member of Porter's immediate family.
Porter's dependent daughter who is away at college
, (a) is classified as part of Porter's immediate
family
(b) is not classified as part of Porter's immediate
family - (a) is correct. (Immediate family) says it includes
dependents. Even though she is away at college she is still a dependent and thus
immediate family.
Porter is a partner in White & Co., CPAs. State whether in
the following situations the person would be classified as
a member of Porter's immediate family.
An elderly aunt of Porter's wife lives in a nursing
home. Porter and his wife pay the monthly nursing
home fees and any other expenses the aunt incurs.
The aunt
(a) is classified as part of Porter's immediate
family
(b) is not classified as part of Porter's immediate
family - (a) is correct. (Immediate family) says it includes
dependents. Since Porter pays all her expenses, she is a dependent and thus a
member of his immediate family
Porter is a partner in White & Co., CPAs. State whether in
the following situations the person would be classified as
a member of Porter's immediate family.
Porter's non-dependent son who lives next door to
his father
(a) is classified as part of Porter's immediate
family
(b) is not classified as part of Porter's immediate
family - (b) is correct. (Immediate family) says it includes
one's spouse, spousal equivalent and dependents.
Porter's son is not dependent on him and is thus not considered immediate family.
Porter is a partner in White & Co., CPAs. State whether in
the following situations the person would be classified as
a member of Porter's immediate family.
Porter's wife who is self-employed and who annually
earns twice as much as Porter earns
(a) is classified as part of Porter's immediate
family
(b) is not classified as part of Porter's immediate
family - (a) is correct. (Immediate family) says it includes
2025/2026 GRADED A+
A distinguishing mark of a profession is:
(a) Acceptance of its responsibility to the public.
(b) The esteem with which it is held by the public.
(c) Its ability to influence legislation. - (a) is correct. As stated in Article II, the
distinguishing mark of a profession is acceptance of its responsibility to the public.
(b) The esteem by which it is held by the public
will come when it shows its responsibility to the public.
(c) Influencing legislation may be important to the profession but it is not the
distinguishing
mark of a profession.
The AICPA Code of Professional Conduct provides
guidance and rules for:
(a) Only members in public practice.
(b) All members.
(c) Only members engaged in rendering attestation
services. - (b) is correct. The Code of Professional Conduct
provides rules for all members, As stated in the Articles, section Composition, the
membership
adopted the code to provide guidance and rules for all members-those in public
practice, in
industry, in government and in education.
Due care requires a member to:
(a) Perform work for clients at the lowest cost.
(b) Perform work for the clients with competence
and diligence.
(c) Complete each year a specified number of
hours of Continuing Professional Education
courses. - (b) is correct. Article V requires a member to per-form his professional work
with competence and diligence.
(a) The Principles do not address the subject of fees or
(c) Continuing Professional Education.
Jones & Barnes, a public accounting firm, has offices
in Minneapolis, Chicago and 10 other cities. The firm 's
executive office and the managing partner are in Chicago.
Each office does all the work and issues the audit reports
for the clients of that office. Black & Co. is an audit client
of the Minneapolis office.
State whether in the following situations the individual
would be a "covered member" with respect to the 2001
calendar year audit of Black & Co.
,Gilbert , a tax partner in the Chicago office
(a) is a covered member.
(b) is not a covered member. - (b) is correct. (Covered member (d)) includes
partners in the office where the attest engagement
partner is located. Since Minneapolis does all the
work for this client the engagement partner has to
be in Minneapolis. Gilbert is in the Chicago office
and therefore he is not a covered member.
Jones & Barnes, a public accounting firm, has offices
in Minneapolis, Chicago and 10 other cities. The firm 's
executive office and the managing partner are in Chicago.
Each office does all the work and issues the audit reports
for the clients of that office. Black & Co. is an audit client
of the Minneapolis office.
State whether in the following situations the individual
would be a "covered member" with respect to the 2001
calendar year audit of Black & Co.
Jacobs, an audit manager in the Minneapolis office,
who does no work on the Black & Co. engagement.
(a) is a covered member.
(b) is not a covered member. - (b) is correct. (Covered member (a)), includes all
people that work on the attest engagement team.
Thus professional staff that work on the audit are
covered members. Since Jacobs does no work on
the Black & Co. engagement, he is not a covered
member. The fact that he is a manager has no bearing on the answer.
Jones & Barnes, a public accounting firm, has offices
in Minneapolis, Chicago and 10 other cities. The firm 's
executive office and the managing partner are in Chicago.
Each office does all the work and issues the audit reports
for the clients of that office. Black & Co. is an audit client
of the Minneapolis office.
State whether in the following situations the individual
would be a "covered member" with respect to the 2001
calendar year audit of Black & Co.
Larson, a consulting services partner, in the Minneapolis
office who has not done any work for Black & Co.
(a) is a covered member
(b) is not a covered member - (a) is correct. (Covered member (d)) includes all
partners in the office where the lead attest engagement partner works. Since
Minneapolis does all the work for this client, the lead attest engagement partner has to
,be in Minneapolis. Larson is a partner in the Minneapolis office, and therefore he is a
covered member even though he never works on the Black & Co. engagement
Jones & Barnes, a public accounting firm, has offices
in Minneapolis, Chicago and 10 other cities. The firm 's
executive office and the managing partner are in Chicago.
Each office does all the work and issues the audit reports
for the clients of that office. Black & Co. is an audit client
of the Minneapolis office.
State whether in the following situations the individual
would be a "covered member" with respect to the 2001
calendar year audit of Black & Co.
Olson, a professional staff person below the rank of
manager, who worked for two weeks in 2001 on a
non attest consulting services engagement for Black
&Co.
(a) is a covered member
(b) is not a covered member - (b) is correct. (Covered member (c)) holds that
partners or managers who provide ten hours or more of non-attest services to a client
within the year are covered members. Olson however is not a partner or manager, and
thus is not a covered member even though he did non-attest services for Black & Co.
Jones & Barnes, a public accounting firm, has offices
in Minneapolis, Chicago and 10 other cities. The firm 's
executive office and the managing partner are in Chicago.
Each office does all the work and issues the audit reports
for the clients of that office. Black & Co. is an audit client
of the Minneapolis office.
State whether in the following situations the individual
would be a "covered member" with respect to the 2001
calendar year audit of Black & Co.
Corey, secretary to the Minneapolis office managing
partner,
(a) is a covered member
(b) is not a covered member - (b) is correct (Attest engagement team) does not
include those performing routine clerical functions. Thus (Covered member (b)) does
not apply to nonprofessional people unless they are in a position where they can
influence the attest engagement. Corey, as a secretary, is thus not a covered member.
Porter is a partner in White & Co., CPAs. State whether in
the following situations the person would be classified as
a member of Porter's immediate family.
Porter's dependent daughter who is away at college
, (a) is classified as part of Porter's immediate
family
(b) is not classified as part of Porter's immediate
family - (a) is correct. (Immediate family) says it includes
dependents. Even though she is away at college she is still a dependent and thus
immediate family.
Porter is a partner in White & Co., CPAs. State whether in
the following situations the person would be classified as
a member of Porter's immediate family.
An elderly aunt of Porter's wife lives in a nursing
home. Porter and his wife pay the monthly nursing
home fees and any other expenses the aunt incurs.
The aunt
(a) is classified as part of Porter's immediate
family
(b) is not classified as part of Porter's immediate
family - (a) is correct. (Immediate family) says it includes
dependents. Since Porter pays all her expenses, she is a dependent and thus a
member of his immediate family
Porter is a partner in White & Co., CPAs. State whether in
the following situations the person would be classified as
a member of Porter's immediate family.
Porter's non-dependent son who lives next door to
his father
(a) is classified as part of Porter's immediate
family
(b) is not classified as part of Porter's immediate
family - (b) is correct. (Immediate family) says it includes
one's spouse, spousal equivalent and dependents.
Porter's son is not dependent on him and is thus not considered immediate family.
Porter is a partner in White & Co., CPAs. State whether in
the following situations the person would be classified as
a member of Porter's immediate family.
Porter's wife who is self-employed and who annually
earns twice as much as Porter earns
(a) is classified as part of Porter's immediate
family
(b) is not classified as part of Porter's immediate
family - (a) is correct. (Immediate family) says it includes
