ACCT 402 (Advanced Accounting 402)
Module B Version 1 Questions and
Answers Study Guide
Ethics - ANSWER>>That branch of philosophy which is the systematic study of
reflective choice, of the standards of right and wrong by which it is to be guided,
and of the goods toward which it may ultimately be directed.
Key elements of Ethics - ANSWER>>Decision problems, Moral principles,
Consequences
What is an ethical problem? - ANSWER>>A situation where an individual must
choose among alternative actions, and the right choice is not absolutely clear.
How does an ethical problem affect others? - ANSWER>>The choice of alternative
actions affects the well-being of other persons.
What is often in conflict in ethical problems? - ANSWER>>There is often a conflict
between what we should do and what we want to do.
Define all facts and circumstances - ANSWER>>The first step in the ethical
decision process, which involves gathering all relevant information and
understanding the context of the situation.
Identify stakeholders - ANSWER>>The second step in the ethical decision process,
which involves recognizing all individuals or groups who are affected by the
decision.
,Identify stakeholders' rights and obligations - ANSWER>>The third step in the
ethical decision process, which involves understanding the rights and
responsibilities of each stakeholder, both in general and in relation to one
another.
Identify alternatives and consequences - ANSWER>>The fourth step in the ethical
decision process, which involves brainstorming possible actions and evaluating
the potential outcomes of each alternative.
Choose superior alternative - ANSWER>>The fifth step in the ethical decision
process, which involves selecting the best option based on the analysis of
consequences and adherence to ethical rules.
The Imperative Principle - ANSWER>>Directs a decision maker to act according to
the requirements of an ethical rule.
Strict versions of imperative ethics - ANSWER>>Maintain that a decision should be
made without trying to predict whether an action will create the greatest balance
of good over evil.
Ethics in the imperative sense - ANSWER>>Is a function of moral rules and
principles and does not involve a situation-specific calculation of the
consequences.
The Principle of Utilitarianism - ANSWER>>Emphasizes examining the
consequences of an action rather than following rules.
Criterion of producing the greater good - ANSWER>>Is made an explicit part of
the decision process in utilitarianism.
Act-utilitarianism - ANSWER>>The center of attention is the individual act as it is
affected by the specific circumstances of a situation.
, Rule-utilitarianism - ANSWER>>Emphasizes the centrality of rules for ethical
behavior while still maintaining the criterion of the greatest universal good.
The Generalization Argument - ANSWER>>A judicious combination of the
imperative and utilitarian principles; to act as one thinks others should act in a
similar circumstance.
Virtue Ethics - ANSWER>>Setting self-focused standards for instilling intra-
personal excellence and building character.
AICPA Code of Professional Conduct - ANSWER>>Basic tenets of ethical conduct
are aspirational goals of behavior.
Independence Rule 1.200.001 - ANSWER>>A member in public practice shall be
independent in the performance of professional services as required by standards
promulgated by bodies designated by Council.
Who is considered a Covered Member according to AICPA? -
ANSWER>>Individuals participating in an engagement, individuals in a position to
influence the engagement, partners or managers providing nonattest services to
an attest client, partners in the office where the engagement partner practices,
the firm's benefit plan, and entities controlled by any covered member.
What are the three steps in the Conceptual Framework for AICPA Independence
Standards? - ANSWER>>1. Identify and evaluate threats to independence. 2.
Determine whether safeguards eliminate or sufficiently mitigate the identified
threats. 3. Determine whether independence is impaired.
What is a familiarity threat to an auditor's independence? - ANSWER>>A
familiarity threat occurs when CPAs have a close or longstanding relationship with
a client.
Module B Version 1 Questions and
Answers Study Guide
Ethics - ANSWER>>That branch of philosophy which is the systematic study of
reflective choice, of the standards of right and wrong by which it is to be guided,
and of the goods toward which it may ultimately be directed.
Key elements of Ethics - ANSWER>>Decision problems, Moral principles,
Consequences
What is an ethical problem? - ANSWER>>A situation where an individual must
choose among alternative actions, and the right choice is not absolutely clear.
How does an ethical problem affect others? - ANSWER>>The choice of alternative
actions affects the well-being of other persons.
What is often in conflict in ethical problems? - ANSWER>>There is often a conflict
between what we should do and what we want to do.
Define all facts and circumstances - ANSWER>>The first step in the ethical
decision process, which involves gathering all relevant information and
understanding the context of the situation.
Identify stakeholders - ANSWER>>The second step in the ethical decision process,
which involves recognizing all individuals or groups who are affected by the
decision.
,Identify stakeholders' rights and obligations - ANSWER>>The third step in the
ethical decision process, which involves understanding the rights and
responsibilities of each stakeholder, both in general and in relation to one
another.
Identify alternatives and consequences - ANSWER>>The fourth step in the ethical
decision process, which involves brainstorming possible actions and evaluating
the potential outcomes of each alternative.
Choose superior alternative - ANSWER>>The fifth step in the ethical decision
process, which involves selecting the best option based on the analysis of
consequences and adherence to ethical rules.
The Imperative Principle - ANSWER>>Directs a decision maker to act according to
the requirements of an ethical rule.
Strict versions of imperative ethics - ANSWER>>Maintain that a decision should be
made without trying to predict whether an action will create the greatest balance
of good over evil.
Ethics in the imperative sense - ANSWER>>Is a function of moral rules and
principles and does not involve a situation-specific calculation of the
consequences.
The Principle of Utilitarianism - ANSWER>>Emphasizes examining the
consequences of an action rather than following rules.
Criterion of producing the greater good - ANSWER>>Is made an explicit part of
the decision process in utilitarianism.
Act-utilitarianism - ANSWER>>The center of attention is the individual act as it is
affected by the specific circumstances of a situation.
, Rule-utilitarianism - ANSWER>>Emphasizes the centrality of rules for ethical
behavior while still maintaining the criterion of the greatest universal good.
The Generalization Argument - ANSWER>>A judicious combination of the
imperative and utilitarian principles; to act as one thinks others should act in a
similar circumstance.
Virtue Ethics - ANSWER>>Setting self-focused standards for instilling intra-
personal excellence and building character.
AICPA Code of Professional Conduct - ANSWER>>Basic tenets of ethical conduct
are aspirational goals of behavior.
Independence Rule 1.200.001 - ANSWER>>A member in public practice shall be
independent in the performance of professional services as required by standards
promulgated by bodies designated by Council.
Who is considered a Covered Member according to AICPA? -
ANSWER>>Individuals participating in an engagement, individuals in a position to
influence the engagement, partners or managers providing nonattest services to
an attest client, partners in the office where the engagement partner practices,
the firm's benefit plan, and entities controlled by any covered member.
What are the three steps in the Conceptual Framework for AICPA Independence
Standards? - ANSWER>>1. Identify and evaluate threats to independence. 2.
Determine whether safeguards eliminate or sufficiently mitigate the identified
threats. 3. Determine whether independence is impaired.
What is a familiarity threat to an auditor's independence? - ANSWER>>A
familiarity threat occurs when CPAs have a close or longstanding relationship with
a client.
