WGU D550 Ethics for Accountants OA:
The Complete 200-Question Exam Bank
with Verified Rationales & Pass
Guarantee (2026/2027 Edition) 100%
Pass!!
Question 1: A CPA who fails to complete a tax return on time, causing
penalties for the client, has violated which AICPA principle?
A. The Public Interest
B. Integrity
C. Due Care
D. Objectivity and Independence
✅ Correct Answer: C. Due Care
Rationale: The principle of Due Care requires carrying out professional
responsibilities with competence, thoroughness, and timely performance.
Failing to meet a deadline and causing client penalties is a direct
violation of this duty .
Question 2: Jane finds a material misstatement while auditing a client's
accounts receivables. Her senior tells her to ignore it so the client does
not get upset. Jane wants to be viewed as a team player to advance in
the firm, so she follows her senior's instructions. Which ethical theory did
Jane use to make her decision?
A. Utilitarianism
B. Deontology
C. Egoism
D. Virtue ethics
✅ Correct Answer: C. Egoism
Rationale: Jane's decision was based on self-interest—advancing in the
,firm and being viewed as a team player. Egoism prioritizes self-interest in
ethical decision-making over duties or consequences to others .
Question 3: According to the AICPA Code, a CPA who serves as a
member of a client's board of directors is most likely violating which
rule?
A. Integrity and Objectivity Rule
B. Independence Rule
C. Confidential Client Information Rule
D. General Standards Rule
✅ Correct Answer: B. Independence Rule
Rationale: A CPA who serves on a client’s board of directors would be
considered part of management. This creates a self-review threat and
impairs independence for attest engagements .
Question 4: Under the Sarbanes-Oxley Act (SOX), which of the following
non-audit services is prohibited for a registered public accounting firm
to provide to its public audit clients?
A. Tax compliance and preparation services
B. Corporate governance advisory services
C. Appraisal or valuation services, fairness opinions, or contribution-
in-kind reports
D. Operational consulting regarding standard business practices
✅ Correct Answer: C. Appraisal or valuation services, fairness
opinions, or contribution-in-kind reports
Rationale: Section 201 of the Sarbanes-Oxley Act explicitly prohibits
these services, as they create a significant self-review threat and impair
auditor independence .
,Question 5: A CPA discloses confidential client information to a
potential buyer of the CPA’s practice as part of due diligence. The client
has not consented. Is this a violation of the AICPA Code?
A. Yes, because client consent is always required before any
disclosure of confidential information.
B. No, because the CPA is selling the practice.
C. Yes, unless the client is a public company.
D. No, because the buyer will be subject to the same confidentiality rules.
✅ Correct Answer: A. Yes, because client consent is always required
before any disclosure of confidential information.
Rationale: The Confidential Client Information Rule prohibits disclosure
without the client's specific consent. While there are exceptions (e.g.,
subpoena, peer review), the sale of a practice is not one of them .
Question 6: A partner who has served as the lead audit partner for 5
consecutive years on a public company audit must rotate off. Under
SEC/SOX rules, what is the required "cooling-off" period before they can
return to the audit?
A. 1 year
B. 5 years
C. 2 years
D. No rotation is required.
✅ Correct Answer: B. 5 years
Rationale: Under SOX and SEC rules, the lead audit partner and the
concurring partner must rotate every five years and are subject to a five-
year "cooling-off" period before they can reassume a role on the audit .
Question 7: The cognitive development approach to ethics refers to:
A. The study of cognitive biases in decision-making
B. The thought process followed in one's moral development
, C. The application of ethical principles to business situations
D. The development of professional competence
✅ Correct Answer: B. The thought process followed in one's moral
development
Rationale: The cognitive development approach, rooted in the work of
Piaget and Kohlberg, examines how individuals develop moral reasoning
and decision-making capabilities over time .
Question 8: Which of the following is NOT a "covered member" under
AICPA independence rules?
A. The audit engagement partner
B. A partner in a different office of the firm who has no involvement with
the audit
C. An individual on the attest engagement team
D. A partner or manager who provides more than 10 hours of non-attest
services to the attest client
✅ Correct Answer: B. A partner in a different office of the firm who
has no involvement with the audit
Rationale: The definition of a covered member specifically includes
those on the engagement team, those in a position to influence the
engagement, and partners/managers providing significant non-attest
services. A partner in a different office with no involvement is generally
not considered a covered member .
Question 9: A CPA is on the audit engagement team for a client. The
CPA's cousin is the client's Chief Financial Officer (CFO). Under the AICPA
Code, what is the most accurate statement regarding this situation?
A. Independence is not impaired because a cousin is not considered a
"close relative."
B. Independence is impaired only if the cousin has a material financial
interest in the client.
C. Independence is impaired because the close relative is in a key
position and the CPA is on the engagement team.
The Complete 200-Question Exam Bank
with Verified Rationales & Pass
Guarantee (2026/2027 Edition) 100%
Pass!!
Question 1: A CPA who fails to complete a tax return on time, causing
penalties for the client, has violated which AICPA principle?
A. The Public Interest
B. Integrity
C. Due Care
D. Objectivity and Independence
✅ Correct Answer: C. Due Care
Rationale: The principle of Due Care requires carrying out professional
responsibilities with competence, thoroughness, and timely performance.
Failing to meet a deadline and causing client penalties is a direct
violation of this duty .
Question 2: Jane finds a material misstatement while auditing a client's
accounts receivables. Her senior tells her to ignore it so the client does
not get upset. Jane wants to be viewed as a team player to advance in
the firm, so she follows her senior's instructions. Which ethical theory did
Jane use to make her decision?
A. Utilitarianism
B. Deontology
C. Egoism
D. Virtue ethics
✅ Correct Answer: C. Egoism
Rationale: Jane's decision was based on self-interest—advancing in the
,firm and being viewed as a team player. Egoism prioritizes self-interest in
ethical decision-making over duties or consequences to others .
Question 3: According to the AICPA Code, a CPA who serves as a
member of a client's board of directors is most likely violating which
rule?
A. Integrity and Objectivity Rule
B. Independence Rule
C. Confidential Client Information Rule
D. General Standards Rule
✅ Correct Answer: B. Independence Rule
Rationale: A CPA who serves on a client’s board of directors would be
considered part of management. This creates a self-review threat and
impairs independence for attest engagements .
Question 4: Under the Sarbanes-Oxley Act (SOX), which of the following
non-audit services is prohibited for a registered public accounting firm
to provide to its public audit clients?
A. Tax compliance and preparation services
B. Corporate governance advisory services
C. Appraisal or valuation services, fairness opinions, or contribution-
in-kind reports
D. Operational consulting regarding standard business practices
✅ Correct Answer: C. Appraisal or valuation services, fairness
opinions, or contribution-in-kind reports
Rationale: Section 201 of the Sarbanes-Oxley Act explicitly prohibits
these services, as they create a significant self-review threat and impair
auditor independence .
,Question 5: A CPA discloses confidential client information to a
potential buyer of the CPA’s practice as part of due diligence. The client
has not consented. Is this a violation of the AICPA Code?
A. Yes, because client consent is always required before any
disclosure of confidential information.
B. No, because the CPA is selling the practice.
C. Yes, unless the client is a public company.
D. No, because the buyer will be subject to the same confidentiality rules.
✅ Correct Answer: A. Yes, because client consent is always required
before any disclosure of confidential information.
Rationale: The Confidential Client Information Rule prohibits disclosure
without the client's specific consent. While there are exceptions (e.g.,
subpoena, peer review), the sale of a practice is not one of them .
Question 6: A partner who has served as the lead audit partner for 5
consecutive years on a public company audit must rotate off. Under
SEC/SOX rules, what is the required "cooling-off" period before they can
return to the audit?
A. 1 year
B. 5 years
C. 2 years
D. No rotation is required.
✅ Correct Answer: B. 5 years
Rationale: Under SOX and SEC rules, the lead audit partner and the
concurring partner must rotate every five years and are subject to a five-
year "cooling-off" period before they can reassume a role on the audit .
Question 7: The cognitive development approach to ethics refers to:
A. The study of cognitive biases in decision-making
B. The thought process followed in one's moral development
, C. The application of ethical principles to business situations
D. The development of professional competence
✅ Correct Answer: B. The thought process followed in one's moral
development
Rationale: The cognitive development approach, rooted in the work of
Piaget and Kohlberg, examines how individuals develop moral reasoning
and decision-making capabilities over time .
Question 8: Which of the following is NOT a "covered member" under
AICPA independence rules?
A. The audit engagement partner
B. A partner in a different office of the firm who has no involvement with
the audit
C. An individual on the attest engagement team
D. A partner or manager who provides more than 10 hours of non-attest
services to the attest client
✅ Correct Answer: B. A partner in a different office of the firm who
has no involvement with the audit
Rationale: The definition of a covered member specifically includes
those on the engagement team, those in a position to influence the
engagement, and partners/managers providing significant non-attest
services. A partner in a different office with no involvement is generally
not considered a covered member .
Question 9: A CPA is on the audit engagement team for a client. The
CPA's cousin is the client's Chief Financial Officer (CFO). Under the AICPA
Code, what is the most accurate statement regarding this situation?
A. Independence is not impaired because a cousin is not considered a
"close relative."
B. Independence is impaired only if the cousin has a material financial
interest in the client.
C. Independence is impaired because the close relative is in a key
position and the CPA is on the engagement team.
