AICPA Practice Questions with Correct
Answers
What are the 10 steps in the ethical decision making model?
Step One: Recognize the Ethical Issue
Step Two: Gather the Critical Facts
Step Three: Identify the Stakeholders
Step Four: Consider Alternatives
Step Five: Consider the Effect on Stakeholders
Step Six: Consider Your Comfort Level
Step Seven: Consider Rules, Regulations, and Laws
Step Eight: Make a Decision
Step Nine: Document your Efforts
Step Ten: Evaluate the Outcome
What does recognizing a potential ethical issue look like?
What does considering your comfort level look like?
Ask yourself "If I had to discuss your decision in public, would you be concerned about it
reflects on your ethics?"
What is the difference between the AICPA, SEC, PCAOB, and your state board of
public accountancy?
The AICPA is the national professional organization for CPAs. AICPA provides resources
and information to members and coordinate activities with state CPA societies. SEC
empowered by congress to regulate financial reporting of PUBLICLY-held companies. SEC
establishes and enforces rules on accounting and auditing (including auditor independence).
,PCAOB (created by SOX and overseen by SEC) establish rules with respect to auditing and
other attestation engagements, quality control of audits, and independence of public auditors.
State Board issues CPA license and are frontline for oversight on ethical behavior. Can create
state ethics codes (can create separate ones, or incorporate AICPA rules). Must follow state
board rules for state they are licensed in.
What is the new structure of the AICPA Ethics codification?
Preface - overview, principles, and definitions)
Part 1 - rules related to those in public practice, conceptual framework on independence and
other rules on ethical conflicts
Part 2 - Rules and interpretations applicable to members in business (private practice)
Part 3 - Rules and interpretations applicable to all other members (retired, between jobs, etc.)
What are the 4 sections of the AICPA Ethics codification?
Pretty sure it's just this again (looked it up and this is what I got everywhere I looked)
1. Preface - overview, principles, and definitions
2. Part 1 - Rules related to those in public practice, conceptual framework on independence
and other rules, guidance on ethical conflict resolution
3. Part 2 - Rules and interpretations applicable to members in business (private practice)
4. Part 3 - Rules and interpretations applicable to all other members (retired, between jobs,
etc.)
What are the 6 pillars/principles of the code and what do each mean?
, (1) responsibilities - In carrying out your professional responsibilities, you should exercise
sensitive professional and moral judgment
(2) serve the public interest - You should act in a way that will serve the public interest,
honor the public trust, and demonstrate your commitment to professionalism
(3) integrity - To maintain and broaden public confidence, you should perform all
professional responsibilities with the highest sense of integrity (being honest even when no
one is looking or "above reproach").
(4) objectivity and independence - You should maintain objectivity and be free from conflicts
of interest in discharging your professional duties.
(5) due care and - You should observe the profession's technical and ethical standards, strive
continually to improve competence and the quality of services, and discharge professional
responsibility to the best of your ability.
(6) scope and nature of services - As a member in public practice, you should observe the
principles of the AICPA Code in determining the scope and nature of services to be
performed
What is the Professional Creed?
As a professional CPA, I willingly accept my responsibility (1) to serve the public interest,
(2) to maintain and broaden public confidence by performing all my responsibilities with
integrity, (3) to maintain my objectivity and be free of conflicts of interest, and to discharge
all of my responsibilities with due care.
What are the AICPA rules on receiving gifts from a client? What factors should be
considered?
Gifts cannot impair your ability to be objective. The following three factors should be
considered:
Answers
What are the 10 steps in the ethical decision making model?
Step One: Recognize the Ethical Issue
Step Two: Gather the Critical Facts
Step Three: Identify the Stakeholders
Step Four: Consider Alternatives
Step Five: Consider the Effect on Stakeholders
Step Six: Consider Your Comfort Level
Step Seven: Consider Rules, Regulations, and Laws
Step Eight: Make a Decision
Step Nine: Document your Efforts
Step Ten: Evaluate the Outcome
What does recognizing a potential ethical issue look like?
What does considering your comfort level look like?
Ask yourself "If I had to discuss your decision in public, would you be concerned about it
reflects on your ethics?"
What is the difference between the AICPA, SEC, PCAOB, and your state board of
public accountancy?
The AICPA is the national professional organization for CPAs. AICPA provides resources
and information to members and coordinate activities with state CPA societies. SEC
empowered by congress to regulate financial reporting of PUBLICLY-held companies. SEC
establishes and enforces rules on accounting and auditing (including auditor independence).
,PCAOB (created by SOX and overseen by SEC) establish rules with respect to auditing and
other attestation engagements, quality control of audits, and independence of public auditors.
State Board issues CPA license and are frontline for oversight on ethical behavior. Can create
state ethics codes (can create separate ones, or incorporate AICPA rules). Must follow state
board rules for state they are licensed in.
What is the new structure of the AICPA Ethics codification?
Preface - overview, principles, and definitions)
Part 1 - rules related to those in public practice, conceptual framework on independence and
other rules on ethical conflicts
Part 2 - Rules and interpretations applicable to members in business (private practice)
Part 3 - Rules and interpretations applicable to all other members (retired, between jobs, etc.)
What are the 4 sections of the AICPA Ethics codification?
Pretty sure it's just this again (looked it up and this is what I got everywhere I looked)
1. Preface - overview, principles, and definitions
2. Part 1 - Rules related to those in public practice, conceptual framework on independence
and other rules, guidance on ethical conflict resolution
3. Part 2 - Rules and interpretations applicable to members in business (private practice)
4. Part 3 - Rules and interpretations applicable to all other members (retired, between jobs,
etc.)
What are the 6 pillars/principles of the code and what do each mean?
, (1) responsibilities - In carrying out your professional responsibilities, you should exercise
sensitive professional and moral judgment
(2) serve the public interest - You should act in a way that will serve the public interest,
honor the public trust, and demonstrate your commitment to professionalism
(3) integrity - To maintain and broaden public confidence, you should perform all
professional responsibilities with the highest sense of integrity (being honest even when no
one is looking or "above reproach").
(4) objectivity and independence - You should maintain objectivity and be free from conflicts
of interest in discharging your professional duties.
(5) due care and - You should observe the profession's technical and ethical standards, strive
continually to improve competence and the quality of services, and discharge professional
responsibility to the best of your ability.
(6) scope and nature of services - As a member in public practice, you should observe the
principles of the AICPA Code in determining the scope and nature of services to be
performed
What is the Professional Creed?
As a professional CPA, I willingly accept my responsibility (1) to serve the public interest,
(2) to maintain and broaden public confidence by performing all my responsibilities with
integrity, (3) to maintain my objectivity and be free of conflicts of interest, and to discharge
all of my responsibilities with due care.
What are the AICPA rules on receiving gifts from a client? What factors should be
considered?
Gifts cannot impair your ability to be objective. The following three factors should be
considered:
