AICPA ETHICS EVALUATION SET QUESTIONS AND
ANSWERS SURE A+
✔✔As a professional CPA, I have a responsibility to maintain and broaden public
confidence by performing all my responsibilities with:
A. Integrity
B. Speed
C. Agility
D. Perfection - ✔✔A. Integrity
Integrity is one of the cornerstones of our profession.
✔✔I also must maintain my objectivity, be free of conflicts of interest, and discharge all
of my responsibilities with due...
A. Respect
B. Care
C. Diligence
D. Speed - ✔✔B. Care
Due care implies a certain level of quality and competence in the performance of
services.
✔✔Bob is a CPA who works as as senior accountant in a small but diversified financial
services company. Bob works for the parent company (bank) in a division that makes
business loans. His mother has been offered a seat on the board of directors of a
subsidiary company that is an investment advisor.
Does Bob's situation cause a significant threat to Bob's integrity and objectivity (conflict
of interest)?
A. No. The bank and investment advisory firm are separate and distinct businesses
B. Yes. Directorships of relatives always result in conflicts of interest
C. Maybe. But more facts should be considered - ✔✔C. Maybe. But more facts should
be considered
We need more information to determine whether this situation creates a significant
threat to Bob's ability to be objective.
, ✔✔Which factor must be in place for you to perform services in light of a potential
conflict of interest?
A. The affected parties have agreed to bring the matter to the BOD
B. The affected parties have agreed not to sue you or your firm
C. You have determined that your threats to objectivity are at an acceptable level
D. You have determined that some third parties might not question your objectivity -
✔✔C. You have determined that your threats to objectivity are at an acceptable level
To proceed with evaluating your potential conflict of interest, you must conclude that
you can provide the services objectively (that is, threats to you objectivity are
insignificant or have been reduced to an acceptable level).
✔✔Suppose a statute exists in your state that allows you to place a lien on client
records in the event of unpaid fees. Given these facts are you obligated to return the
client's records?
A. No, not until he pays the $5,000 he owes you
B. Yes, these records should be provided upon request - ✔✔B. Yes, these records
should be provided upon request
The code requires you to return client provided records under all circumstances.
✔✔As part of your work, you prepared several schedules relating to the client's
investment trading activity. He now says he needs those schedules so that he can
complete his tax return himself. Are you required to return those records?
A. No, these are not considered client-provided records
B. Yes, schedules that you prepare are conspired client provided records - ✔✔A. No,
these are not considered client-provided records
Your work papers, including analyses and schedules prepared by the client at your
request, are your property, not client provided records.
✔✔You are receiving requests from all the LPs asking that they receive copies if the
partnership records. They claim the GP refused to furnish these records and referred all
inquiries to you. Are you required to furnish these to all LPs that ask?
A. No, since they are not the client representative
B. Yes, because they have a legitimate need for them - ✔✔A. No, since they are not the
client representative
The code generally requires you to return client records once to the client's
representative. After you have delivered them to the GP (client's representative), you
need not comply with subsequent requests to again provide this information, so that the
information does not get into the wrong hands. However, if as a result of a natural
disaster or act of war, the client (GP) loses records that you had previously provided to
him/her, you should honor this request.
✔✔Alf & Company, CPAs decides to subcontract a portion of its tax return preparation
work to Dee Howard (DH) Tax Preparation Services, an unaffiliated income tax service
provider. What does Alf & Company need to do to outsource the tax work?
I Ensure that DH is current in its income tax obligations
ANSWERS SURE A+
✔✔As a professional CPA, I have a responsibility to maintain and broaden public
confidence by performing all my responsibilities with:
A. Integrity
B. Speed
C. Agility
D. Perfection - ✔✔A. Integrity
Integrity is one of the cornerstones of our profession.
✔✔I also must maintain my objectivity, be free of conflicts of interest, and discharge all
of my responsibilities with due...
A. Respect
B. Care
C. Diligence
D. Speed - ✔✔B. Care
Due care implies a certain level of quality and competence in the performance of
services.
✔✔Bob is a CPA who works as as senior accountant in a small but diversified financial
services company. Bob works for the parent company (bank) in a division that makes
business loans. His mother has been offered a seat on the board of directors of a
subsidiary company that is an investment advisor.
Does Bob's situation cause a significant threat to Bob's integrity and objectivity (conflict
of interest)?
A. No. The bank and investment advisory firm are separate and distinct businesses
B. Yes. Directorships of relatives always result in conflicts of interest
C. Maybe. But more facts should be considered - ✔✔C. Maybe. But more facts should
be considered
We need more information to determine whether this situation creates a significant
threat to Bob's ability to be objective.
, ✔✔Which factor must be in place for you to perform services in light of a potential
conflict of interest?
A. The affected parties have agreed to bring the matter to the BOD
B. The affected parties have agreed not to sue you or your firm
C. You have determined that your threats to objectivity are at an acceptable level
D. You have determined that some third parties might not question your objectivity -
✔✔C. You have determined that your threats to objectivity are at an acceptable level
To proceed with evaluating your potential conflict of interest, you must conclude that
you can provide the services objectively (that is, threats to you objectivity are
insignificant or have been reduced to an acceptable level).
✔✔Suppose a statute exists in your state that allows you to place a lien on client
records in the event of unpaid fees. Given these facts are you obligated to return the
client's records?
A. No, not until he pays the $5,000 he owes you
B. Yes, these records should be provided upon request - ✔✔B. Yes, these records
should be provided upon request
The code requires you to return client provided records under all circumstances.
✔✔As part of your work, you prepared several schedules relating to the client's
investment trading activity. He now says he needs those schedules so that he can
complete his tax return himself. Are you required to return those records?
A. No, these are not considered client-provided records
B. Yes, schedules that you prepare are conspired client provided records - ✔✔A. No,
these are not considered client-provided records
Your work papers, including analyses and schedules prepared by the client at your
request, are your property, not client provided records.
✔✔You are receiving requests from all the LPs asking that they receive copies if the
partnership records. They claim the GP refused to furnish these records and referred all
inquiries to you. Are you required to furnish these to all LPs that ask?
A. No, since they are not the client representative
B. Yes, because they have a legitimate need for them - ✔✔A. No, since they are not the
client representative
The code generally requires you to return client records once to the client's
representative. After you have delivered them to the GP (client's representative), you
need not comply with subsequent requests to again provide this information, so that the
information does not get into the wrong hands. However, if as a result of a natural
disaster or act of war, the client (GP) loses records that you had previously provided to
him/her, you should honor this request.
✔✔Alf & Company, CPAs decides to subcontract a portion of its tax return preparation
work to Dee Howard (DH) Tax Preparation Services, an unaffiliated income tax service
provider. What does Alf & Company need to do to outsource the tax work?
I Ensure that DH is current in its income tax obligations
