WGU D216 Business Law for Accountants |OA|
Objective Assessment | Questions and Correct
Answers |Update 2026
SECTION 1: LEGAL SYSTEM, ETHICS, & SOX (Questions 1-12)
Question 1
A hardware store proactively informs clients whenever recalls happen. It is always willing
to replace defective items at no cost even if the warranty has expired. Its philosophy is
to maximize benefits and minimize harm. This approach is known as:
A) Duty-based ethics
B) Outcome-based ethics
C) Corporate social responsibility
D) Kantian ethics
,Answer: B) Outcome-based ethics
Rationale: Outcome-based ethics (utilitarianism) focuses on the consequences of an
action, specifically seeking the greatest good for the greatest number (maximizing
benefits/minimizing harm). The company's emphasis on maximizing benefits to customers
and minimizing harm aligns with this ethical framework.
Question 2
Under the Sarbanes-Oxley Act (SOX), who is primarily responsible for certifying the
accuracy of information contained in a public company's financial statements?
A) The independent external auditor
B) The board of directors
C) The Chief Executive Officer (CEO) and Chief Financial Officer (CFO)
D) The Securities and Exchange Commission (SEC)
Answer: C) The Chief Executive Officer (CEO) and Chief Financial Officer (CFO)
Rationale: SOX requires both the CEO and CFO to personally certify that the financial
statements and disclosures are accurate and fairly presented. The independent external
auditor audits the statements but does not certify them in the same way .
Question 3
,A public company's CEO and CFO certified the annual 10-K, but only the CEO certified
the quarterly 10-Q. Has the company complied with SOX?
A) Yes, because only the CEO is required to sign the 10-Q
B) No, because the CFO did not certify the quarterly filing
C) Yes, because annual filings are the only ones requiring dual certification
D) No, because the audit committee must certify all filings
Answer: B) No, because the CFO did not certify the quarterly filing
Rationale: SOX explicitly requires both the CEO and CFO to certify all periodic reports
(both 10-K annual and 10-Q quarterly). Failure to have both certify the 10-Q represents a
violation .
Question 4
An accountant discovers a minor error in a previous year's tax filing that benefits the
client. The client refuses to correct it. What is the accountant's ethical duty under AICPA
guidelines?
A) Remain silent due to client confidentiality
B) Disengage from the engagement and consider filing a whistleblower report
C) Ignore it since the statute of limitations has likely passed
D) Report the client to the IRS immediately
, Answer: B) Disengage from the engagement and consider filing a whistleblower
report
Rationale: Accountants cannot associate with false filings. If a client refuses to correct a
material error, the accountant must withdraw from the engagement and may need to
consult legal counsel regarding filing a Form 211 (whistleblower) .
Question 5
The Sarbanes-Oxley Act made it a federal crime, punishable by up to 20 years in prison,
to:
A) Evade state income tax
B) Destroy documents to impede a federal investigation
C) Hire an illegal immigrant
D) Breach a written contract
Answer: B) Destroy documents to impede a federal investigation
Rationale: SOX § 802 specifically makes the destruction, alteration, or falsification of
records with the intent to obstruct a federal investigation a felony, punishable by up to 20
years in prison .
Question 6
Which of the following activities is considered illegal under federal securities law?
Objective Assessment | Questions and Correct
Answers |Update 2026
SECTION 1: LEGAL SYSTEM, ETHICS, & SOX (Questions 1-12)
Question 1
A hardware store proactively informs clients whenever recalls happen. It is always willing
to replace defective items at no cost even if the warranty has expired. Its philosophy is
to maximize benefits and minimize harm. This approach is known as:
A) Duty-based ethics
B) Outcome-based ethics
C) Corporate social responsibility
D) Kantian ethics
,Answer: B) Outcome-based ethics
Rationale: Outcome-based ethics (utilitarianism) focuses on the consequences of an
action, specifically seeking the greatest good for the greatest number (maximizing
benefits/minimizing harm). The company's emphasis on maximizing benefits to customers
and minimizing harm aligns with this ethical framework.
Question 2
Under the Sarbanes-Oxley Act (SOX), who is primarily responsible for certifying the
accuracy of information contained in a public company's financial statements?
A) The independent external auditor
B) The board of directors
C) The Chief Executive Officer (CEO) and Chief Financial Officer (CFO)
D) The Securities and Exchange Commission (SEC)
Answer: C) The Chief Executive Officer (CEO) and Chief Financial Officer (CFO)
Rationale: SOX requires both the CEO and CFO to personally certify that the financial
statements and disclosures are accurate and fairly presented. The independent external
auditor audits the statements but does not certify them in the same way .
Question 3
,A public company's CEO and CFO certified the annual 10-K, but only the CEO certified
the quarterly 10-Q. Has the company complied with SOX?
A) Yes, because only the CEO is required to sign the 10-Q
B) No, because the CFO did not certify the quarterly filing
C) Yes, because annual filings are the only ones requiring dual certification
D) No, because the audit committee must certify all filings
Answer: B) No, because the CFO did not certify the quarterly filing
Rationale: SOX explicitly requires both the CEO and CFO to certify all periodic reports
(both 10-K annual and 10-Q quarterly). Failure to have both certify the 10-Q represents a
violation .
Question 4
An accountant discovers a minor error in a previous year's tax filing that benefits the
client. The client refuses to correct it. What is the accountant's ethical duty under AICPA
guidelines?
A) Remain silent due to client confidentiality
B) Disengage from the engagement and consider filing a whistleblower report
C) Ignore it since the statute of limitations has likely passed
D) Report the client to the IRS immediately
, Answer: B) Disengage from the engagement and consider filing a whistleblower
report
Rationale: Accountants cannot associate with false filings. If a client refuses to correct a
material error, the accountant must withdraw from the engagement and may need to
consult legal counsel regarding filing a Form 211 (whistleblower) .
Question 5
The Sarbanes-Oxley Act made it a federal crime, punishable by up to 20 years in prison,
to:
A) Evade state income tax
B) Destroy documents to impede a federal investigation
C) Hire an illegal immigrant
D) Breach a written contract
Answer: B) Destroy documents to impede a federal investigation
Rationale: SOX § 802 specifically makes the destruction, alteration, or falsification of
records with the intent to obstruct a federal investigation a felony, punishable by up to 20
years in prison .
Question 6
Which of the following activities is considered illegal under federal securities law?
