AICPA ETHICS CODE EXAM
COMPREHENSIVE QUESTIONS AND
SOLUTIONS
◉ evaluate whether that relationship
or circumstance would lead a reasonable and informed third
party who is aware of the relevant information
to conclude that there is a threat to the member's compliance
with the rules that is not at an acceptable level.
Answer: in the absence of an interpretation that addresses a
particular relationship or circumstance, a member should
◉ Identify Threats, Evaluate Threat Significance, Identify and
Apply Safeguards
Answer: Conceptual Framework Approach:
◉ threat that a member will not act with objectivity because the
member's
interests are opposed to the client's interests. examples- think of
lawsuits
Answer: adverse interest threat
,◉ threat that a member will promote a client's interests or
position to the point that his
or her objectivity or independence is compromised. Examples-
think of firm doing extra services for client
a. A member promotes the attest client's securities as part of an
initial public offering. [1.295.130]
b. A member provides expert witness services to an attest client.
[1.295.140]
c. A member represents an attest client in U.S. tax court or other
public forum. [1.295.160]
Answer: Advocacy threat
◉ long or close relationship with client
b. A partner or partner equivalent of the firm has been a member
of the attest engagement team for
a prolonged period.
c. A member of the firm has recently been a director or an officer
of the attest client. [1.277.010]
d. A member of the attest engagement team has a close friend who
is in a key position at the attest client.
Answer: Familiarity threat
◉ (threat that a member will take on the role of client
management or
, otherwise assume management responsibilities, such may occur
during an engagement to provide nonattest
services.)
a. A member serves as an officer or a director of the attest client.
[1.275.005]
Part 1 — Members in Public Practice
41
b. A member accepts responsibility for designing, implementing,
or maintaining internal controls for
the attest client. [1.295.030]
c. A member hires, supervises, or terminates the attest client's
employees. [1.295.135]
Answer: management participation threat
◉ (threat that a member could benefit, financially or otherwise,
from an interest
in, or relationship with, a client or persons associated with the
client.)
a. A member has a direct financial interest or material indirect
financial interest in the attest client.
[1.240.010]
b. A member has a loan from the attest client, an officer or a
director of the attest client, or an individual
COMPREHENSIVE QUESTIONS AND
SOLUTIONS
◉ evaluate whether that relationship
or circumstance would lead a reasonable and informed third
party who is aware of the relevant information
to conclude that there is a threat to the member's compliance
with the rules that is not at an acceptable level.
Answer: in the absence of an interpretation that addresses a
particular relationship or circumstance, a member should
◉ Identify Threats, Evaluate Threat Significance, Identify and
Apply Safeguards
Answer: Conceptual Framework Approach:
◉ threat that a member will not act with objectivity because the
member's
interests are opposed to the client's interests. examples- think of
lawsuits
Answer: adverse interest threat
,◉ threat that a member will promote a client's interests or
position to the point that his
or her objectivity or independence is compromised. Examples-
think of firm doing extra services for client
a. A member promotes the attest client's securities as part of an
initial public offering. [1.295.130]
b. A member provides expert witness services to an attest client.
[1.295.140]
c. A member represents an attest client in U.S. tax court or other
public forum. [1.295.160]
Answer: Advocacy threat
◉ long or close relationship with client
b. A partner or partner equivalent of the firm has been a member
of the attest engagement team for
a prolonged period.
c. A member of the firm has recently been a director or an officer
of the attest client. [1.277.010]
d. A member of the attest engagement team has a close friend who
is in a key position at the attest client.
Answer: Familiarity threat
◉ (threat that a member will take on the role of client
management or
, otherwise assume management responsibilities, such may occur
during an engagement to provide nonattest
services.)
a. A member serves as an officer or a director of the attest client.
[1.275.005]
Part 1 — Members in Public Practice
41
b. A member accepts responsibility for designing, implementing,
or maintaining internal controls for
the attest client. [1.295.030]
c. A member hires, supervises, or terminates the attest client's
employees. [1.295.135]
Answer: management participation threat
◉ (threat that a member could benefit, financially or otherwise,
from an interest
in, or relationship with, a client or persons associated with the
client.)
a. A member has a direct financial interest or material indirect
financial interest in the attest client.
[1.240.010]
b. A member has a loan from the attest client, an officer or a
director of the attest client, or an individual
