CPA Ethics Exam Questions And Answers
Which bcategory bcontains bthe bethical bstandards, ba
violation bof bwhich bmakes ba bmember bliable bto bdisciplinary
action?
(a) bEthics bRulings.
(b) bInterpretations bof bthe bRules.
(c) bRules. b- bcorrect banswers✔✔(c) bis bthe bconect banswer. bCode bof bProfessional
Conduct, bStrncture, bsays bthat binfraction bof bany bof bthe brules bmakes ba bmember
bliable bto bdisciplinary baction.
(a) bis bwrong bsince bmembers bwho bdepart bfrom bthe
guidance bin bethical brulings bin bsimilar bcircumstances
will bbe basked bto bjustify bsuch bdeparture. bThey bcannot
however bbe bcharged bwith bviolating ba bruling.
(b) bis balso bwrong bsince ba bmember bcannot bbe
charged bwith bviolating ban binterpretation. bIn ba bdisciplina1y
hearing bwhere bthe bmember bwas bcharged bwith
violating ba brnle, bthe bmember bwould bhave bthe bburden bof bjustifying bany bdeparture
bfrom binterpretations bofthat brule.
The bTrial bBoard bmay, bafter ba bhearing, bdo btwo bof bthe
three bthings blisted bbelow. bMark bthe bone bthat bthe bTrial
Board bcannot bdo.
(a) bSuspend ba bmember.
(b) bSuspend bthe bmember's bCPA bcertificate.
( bc) bExpel ba bmember. b- bcorrect banswers✔✔(b) bis bthe bcorrect banswer. bCode bof
bProfessional
Conduct, bEnforcement, bsays ba bTrial bBoard bmay
admonish, bsuspend bor bexpel ba bmember. bThe bTrial
Board bhas bno bjurisdiction bover ba bmember's bCPA
certificate.
Which bof bthe bfollowing brequires bthat bany bchanges bin
them bbe bapproved bby bthe bmembers bof bthe bAICPA?
(a) bRules band binterpretations bof bthe brules.
(b) bPrinciples band brules.
(c) bPrinciples, brules band binterpretations bof bthe brules. b- bcorrect banswers✔✔(b) bis
bcorrect. bCode bof bProfessional bConduct,
Structure, bsays bthat bPrinciples band bRules bmust bbe
approved bby bthe bAI bCPA bmembers.
,(a) bis bwrong band b...
( bc) bis bwrong bsince binterpretations bare bprepared band bissued bby bthe bProfessional
bEthics bExecutive bCommittee bwithout bobtaining bapproval bby bthe bmembers.
The bresults bof ba bguilty bfinding bby ba bTrial bBoard bwill
be:
(a) bpublished bby bthe bAICPA, bbut bthe bmember b's bname bwill bnot bbe bdisclosed.
(b) bpublished bby bthe bAICPA. band bthe bmember b's bname bwill bbe bdisclosed bif bthe
bTrial bBoard bvotes bto bdo b
so.
(c) bpublished bby bthe bAICPA bwith bthe bmember b's
name bgiven. b- bcorrect banswers✔✔(c) bis bcorrect. bCode bof bProfessional bConduct,
Enforcement bsays bthat bTrial bBoard bconvictions bmust
be bpublished bwith bthe bmember's bname bdisclosed.
(a) bis bthen bwrong bsince bthe bname bmust bbe bdisclosed.
(b) bis balso bwrong bsince bthe bTrial bBoard bdoes bnot bhave bthe boption bof bdeciding
bwhether bor bnot bthe bmember's bname bwill bbe bdisclosed.
An binterpretation bor bethics bruling busually bbecomes
effective:
(a) bthe bfirst bday bof bthe bmonth bfollowing bthe
month bit bis bpublished bin bthe bJournal bof bAccountancy.
(b) btwo bweeks bafter bit bis bpublished bin bThe bCPA
Letter.
(c) bthe blast bday bof bthe bmonth bin bwhich bit bis
published bin bthe bJournal bof bAccountancy. b- bcorrect banswers✔✔(c) bis bcorect. bCode
bof bProfessional bConduct,
Structure, bsays bthat binterpretations band brulings bare
normally beffective bthe blast bday bof bthe bmonth bthey bare bpublished bin bthe bJournal bof
bAccountancy.
(a) band b(b) bare btherefore bwrong.
A bCPA bin bpublic bpractice b______________ bavoid boperating
under ba bcode bof bprofessional bethics bby bchoosing bnot
to bjoin beither bthe bAICPA bor bany bstate bCPA bsociety.
(a) bmay
(b) bmay bnot b- bcorrect banswers✔✔(b) bis bcorrect. bCode bof bProfessional bConduct,
bCoverage, bsays bthat bno bCPA bpracticing bpublic baccounting bmay bavoid boperating
bunder ba bcode bof bethics. bThe bCPA bmay bnot bjoin bthe bAI bCPA bor bhis bor bher bstate
bCPA bsociety band btherefore bwould bnot bbe bsubject bto btheir bcodes bof bethics. bThe
bCPA, bhowever, bcannot bavoid bbeing bsubject bto bhis bor bher bstate bboard bof
baccountancy's bcode bof bethics
The baccounting bprofession b's bpublic bincludes
(a) bGovernmental bagencies.
(b) bCredit bgrantors.
,(c) bInvestors.
(d) bAll bof bthe babove b- bcorrect banswers✔✔(d) bis bthe bcorrect banswer. bAs b(see
bArticle bII) bthe
CPA's bpublic bincludes beveryone bthat brelies bon bthem. bThis bthen bwould binclude
(a) bgovernmental bagencies,
(b) bcredit bgrantors band
(c) binvestors.
Compliance bwith bthe bAICPA bCode bof bProfessional
Conduct bdepends bprimarily bon:
(a) bPublic bopinion band breinforcement bof bone's battestation bpeers.
(b) bDisciplinary bproceedings bwhen bthe bcode bis
violated.
(c) bMember's bunderstanding bthe bcode band bvoluntary bcompliance bwith bit. b- bcorrect
banswers✔✔(c) bis bthe bcorrect banswer. bComposition, bApplicability
and bCompliance bin bthe bArticles bsays bthat bcompliance bwith bthe bcode, bas bwith ball
bstandards bin ban bopen bsociety, bdepends bprimarily bon bmember b's bunderstanding bof
bthe bcode band bvoluntary bcompliance bwith bit.
(a) bis bwrong. bThis bsection bsays bthat breinforcement bby bone's bpeers band bpublic
bopinion bis bsecondary b
in bobtaining bcompliance bwith bthe bcode.
(b) bis balso bwrong bsince bthis bsection bsays bdisciplinary bproceedings bagainst bthose
bthat bviolate bthe bcode bare bthe bultimate bor bfinal bmethod bof bobtaining bcompliance.
The bPrinciples bstate bthat ba bmember bhas bresponsibility
to:
(a) bColleagues.
(b) bClients.
(c) bThe bpublic.
(d) bAll bof bthe babove. b- bcorrect banswers✔✔(d) bis bcorrect. bThe bPreamble bto bthe
bArticles bsays bthat bmembers bhave
(a) ba bresponsibility bto bcolleagues,
(b) bto bclients band
(c) bto bthe bpublic.
The bPrinciples bin bthe bAICPA bCode bof bProfessional
Conduct b___________________ benforceable bunder btheir bown bterms.
(a) bare.
(b) bare bnot. b- bcorrect banswers✔✔(b) bis bcorrect. bPrinciples bare bnot benforceable
bunder
their bown bterms bas bshown bin bthe bsection bPurpose. bPrinciples bare bgoal-oriented
band bthe brules bof b
ethics bare bmade band badopted bwithin bthat bframework.
A bdistinguishing bmark bof ba bprofession bis:
(a) bAcceptance bof bits bresponsibility bto bthe bpublic.
, (b) bThe besteem bwith bwhich bit bis bheld bby bthe bpublic.
(c) bIts bability bto binfluence blegislation. b- bcorrect banswers✔✔(a) bis bcorrect. bAs
bstated bin bArticle bII, bthe bdistinguishing bmark bof ba bprofession bis bacceptance bof bits
bresponsibility bto bthe bpublic.
(b) bThe besteem bby bwhich bit bis bheld bby bthe bpublic
will bcome bwhen bit bshows bits bresponsibility bto bthe bpublic.
(c) bInfluencing blegislation bmay bbe bimportant bto bthe bprofession bbut bit bis bnot bthe
bdistinguishing b
mark bof ba bprofession.
The bAICPA bCode bof bProfessional bConduct bprovides
guidance band brules bfor:
(a) bOnly bmembers bin bpublic bpractice.
(b) bAll bmembers.
(c) bOnly bmembers bengaged bin brendering battestation
services. b- bcorrect banswers✔✔(b) bis bcorrect. bThe bCode bof bProfessional bConduct
provides brules bfor ball bmembers, bAs bstated bin bthe bArticles, bsection bComposition,
bthe bmembership b
adopted bthe bcode bto bprovide bguidance band brules bfor ball bmembers-those bin bpublic
bpractice, bin b
industry, bin bgovernment band bin beducation.
Due bcare brequires ba bmember bto:
(a) bPerform bwork bfor bclients bat bthe blowest bcost.
(b) bPerform bwork bfor bthe bclients bwith bcompetence
and bdiligence.
(c) bComplete beach byear ba bspecified bnumber bof
hours bof bContinuing bProfessional bEducation
courses. b- bcorrect banswers✔✔(b) bis bcorrect. bArticle bV brequires ba bmember bto bper-
form bhis bprofessional bwork bwith bcompetence band bdiligence.
(a) bThe bPrinciples bdo bnot baddress bthe bsubject bof bfees bor
(c) bContinuing bProfessional bEducation.
Jones b& bBarnes, ba bpublic baccounting bfirm, bhas boffices
in bMinneapolis, bChicago band b10 bother bcities. bThe bfirm b's
executive boffice band bthe bmanaging bpartner bare bin bChicago.
Each boffice bdoes ball bthe bwork band bissues bthe baudit breports
for bthe bclients bof bthat boffice. bBlack b& bCo. bis ban baudit bclient
of bthe bMinneapolis boffice.
State bwhether bin bthe bfollowing bsituations bthe bindividual
would bbe ba b"covered bmember" bwith brespect bto bthe b2001
calendar byear baudit bof bBlack b& bCo.
Gilbert b, ba btax bpartner bin bthe bChicago boffice
(a) bis ba bcovered bmember.
Which bcategory bcontains bthe bethical bstandards, ba
violation bof bwhich bmakes ba bmember bliable bto bdisciplinary
action?
(a) bEthics bRulings.
(b) bInterpretations bof bthe bRules.
(c) bRules. b- bcorrect banswers✔✔(c) bis bthe bconect banswer. bCode bof bProfessional
Conduct, bStrncture, bsays bthat binfraction bof bany bof bthe brules bmakes ba bmember
bliable bto bdisciplinary baction.
(a) bis bwrong bsince bmembers bwho bdepart bfrom bthe
guidance bin bethical brulings bin bsimilar bcircumstances
will bbe basked bto bjustify bsuch bdeparture. bThey bcannot
however bbe bcharged bwith bviolating ba bruling.
(b) bis balso bwrong bsince ba bmember bcannot bbe
charged bwith bviolating ban binterpretation. bIn ba bdisciplina1y
hearing bwhere bthe bmember bwas bcharged bwith
violating ba brnle, bthe bmember bwould bhave bthe bburden bof bjustifying bany bdeparture
bfrom binterpretations bofthat brule.
The bTrial bBoard bmay, bafter ba bhearing, bdo btwo bof bthe
three bthings blisted bbelow. bMark bthe bone bthat bthe bTrial
Board bcannot bdo.
(a) bSuspend ba bmember.
(b) bSuspend bthe bmember's bCPA bcertificate.
( bc) bExpel ba bmember. b- bcorrect banswers✔✔(b) bis bthe bcorrect banswer. bCode bof
bProfessional
Conduct, bEnforcement, bsays ba bTrial bBoard bmay
admonish, bsuspend bor bexpel ba bmember. bThe bTrial
Board bhas bno bjurisdiction bover ba bmember's bCPA
certificate.
Which bof bthe bfollowing brequires bthat bany bchanges bin
them bbe bapproved bby bthe bmembers bof bthe bAICPA?
(a) bRules band binterpretations bof bthe brules.
(b) bPrinciples band brules.
(c) bPrinciples, brules band binterpretations bof bthe brules. b- bcorrect banswers✔✔(b) bis
bcorrect. bCode bof bProfessional bConduct,
Structure, bsays bthat bPrinciples band bRules bmust bbe
approved bby bthe bAI bCPA bmembers.
,(a) bis bwrong band b...
( bc) bis bwrong bsince binterpretations bare bprepared band bissued bby bthe bProfessional
bEthics bExecutive bCommittee bwithout bobtaining bapproval bby bthe bmembers.
The bresults bof ba bguilty bfinding bby ba bTrial bBoard bwill
be:
(a) bpublished bby bthe bAICPA, bbut bthe bmember b's bname bwill bnot bbe bdisclosed.
(b) bpublished bby bthe bAICPA. band bthe bmember b's bname bwill bbe bdisclosed bif bthe
bTrial bBoard bvotes bto bdo b
so.
(c) bpublished bby bthe bAICPA bwith bthe bmember b's
name bgiven. b- bcorrect banswers✔✔(c) bis bcorrect. bCode bof bProfessional bConduct,
Enforcement bsays bthat bTrial bBoard bconvictions bmust
be bpublished bwith bthe bmember's bname bdisclosed.
(a) bis bthen bwrong bsince bthe bname bmust bbe bdisclosed.
(b) bis balso bwrong bsince bthe bTrial bBoard bdoes bnot bhave bthe boption bof bdeciding
bwhether bor bnot bthe bmember's bname bwill bbe bdisclosed.
An binterpretation bor bethics bruling busually bbecomes
effective:
(a) bthe bfirst bday bof bthe bmonth bfollowing bthe
month bit bis bpublished bin bthe bJournal bof bAccountancy.
(b) btwo bweeks bafter bit bis bpublished bin bThe bCPA
Letter.
(c) bthe blast bday bof bthe bmonth bin bwhich bit bis
published bin bthe bJournal bof bAccountancy. b- bcorrect banswers✔✔(c) bis bcorect. bCode
bof bProfessional bConduct,
Structure, bsays bthat binterpretations band brulings bare
normally beffective bthe blast bday bof bthe bmonth bthey bare bpublished bin bthe bJournal bof
bAccountancy.
(a) band b(b) bare btherefore bwrong.
A bCPA bin bpublic bpractice b______________ bavoid boperating
under ba bcode bof bprofessional bethics bby bchoosing bnot
to bjoin beither bthe bAICPA bor bany bstate bCPA bsociety.
(a) bmay
(b) bmay bnot b- bcorrect banswers✔✔(b) bis bcorrect. bCode bof bProfessional bConduct,
bCoverage, bsays bthat bno bCPA bpracticing bpublic baccounting bmay bavoid boperating
bunder ba bcode bof bethics. bThe bCPA bmay bnot bjoin bthe bAI bCPA bor bhis bor bher bstate
bCPA bsociety band btherefore bwould bnot bbe bsubject bto btheir bcodes bof bethics. bThe
bCPA, bhowever, bcannot bavoid bbeing bsubject bto bhis bor bher bstate bboard bof
baccountancy's bcode bof bethics
The baccounting bprofession b's bpublic bincludes
(a) bGovernmental bagencies.
(b) bCredit bgrantors.
,(c) bInvestors.
(d) bAll bof bthe babove b- bcorrect banswers✔✔(d) bis bthe bcorrect banswer. bAs b(see
bArticle bII) bthe
CPA's bpublic bincludes beveryone bthat brelies bon bthem. bThis bthen bwould binclude
(a) bgovernmental bagencies,
(b) bcredit bgrantors band
(c) binvestors.
Compliance bwith bthe bAICPA bCode bof bProfessional
Conduct bdepends bprimarily bon:
(a) bPublic bopinion band breinforcement bof bone's battestation bpeers.
(b) bDisciplinary bproceedings bwhen bthe bcode bis
violated.
(c) bMember's bunderstanding bthe bcode band bvoluntary bcompliance bwith bit. b- bcorrect
banswers✔✔(c) bis bthe bcorrect banswer. bComposition, bApplicability
and bCompliance bin bthe bArticles bsays bthat bcompliance bwith bthe bcode, bas bwith ball
bstandards bin ban bopen bsociety, bdepends bprimarily bon bmember b's bunderstanding bof
bthe bcode band bvoluntary bcompliance bwith bit.
(a) bis bwrong. bThis bsection bsays bthat breinforcement bby bone's bpeers band bpublic
bopinion bis bsecondary b
in bobtaining bcompliance bwith bthe bcode.
(b) bis balso bwrong bsince bthis bsection bsays bdisciplinary bproceedings bagainst bthose
bthat bviolate bthe bcode bare bthe bultimate bor bfinal bmethod bof bobtaining bcompliance.
The bPrinciples bstate bthat ba bmember bhas bresponsibility
to:
(a) bColleagues.
(b) bClients.
(c) bThe bpublic.
(d) bAll bof bthe babove. b- bcorrect banswers✔✔(d) bis bcorrect. bThe bPreamble bto bthe
bArticles bsays bthat bmembers bhave
(a) ba bresponsibility bto bcolleagues,
(b) bto bclients band
(c) bto bthe bpublic.
The bPrinciples bin bthe bAICPA bCode bof bProfessional
Conduct b___________________ benforceable bunder btheir bown bterms.
(a) bare.
(b) bare bnot. b- bcorrect banswers✔✔(b) bis bcorrect. bPrinciples bare bnot benforceable
bunder
their bown bterms bas bshown bin bthe bsection bPurpose. bPrinciples bare bgoal-oriented
band bthe brules bof b
ethics bare bmade band badopted bwithin bthat bframework.
A bdistinguishing bmark bof ba bprofession bis:
(a) bAcceptance bof bits bresponsibility bto bthe bpublic.
, (b) bThe besteem bwith bwhich bit bis bheld bby bthe bpublic.
(c) bIts bability bto binfluence blegislation. b- bcorrect banswers✔✔(a) bis bcorrect. bAs
bstated bin bArticle bII, bthe bdistinguishing bmark bof ba bprofession bis bacceptance bof bits
bresponsibility bto bthe bpublic.
(b) bThe besteem bby bwhich bit bis bheld bby bthe bpublic
will bcome bwhen bit bshows bits bresponsibility bto bthe bpublic.
(c) bInfluencing blegislation bmay bbe bimportant bto bthe bprofession bbut bit bis bnot bthe
bdistinguishing b
mark bof ba bprofession.
The bAICPA bCode bof bProfessional bConduct bprovides
guidance band brules bfor:
(a) bOnly bmembers bin bpublic bpractice.
(b) bAll bmembers.
(c) bOnly bmembers bengaged bin brendering battestation
services. b- bcorrect banswers✔✔(b) bis bcorrect. bThe bCode bof bProfessional bConduct
provides brules bfor ball bmembers, bAs bstated bin bthe bArticles, bsection bComposition,
bthe bmembership b
adopted bthe bcode bto bprovide bguidance band brules bfor ball bmembers-those bin bpublic
bpractice, bin b
industry, bin bgovernment band bin beducation.
Due bcare brequires ba bmember bto:
(a) bPerform bwork bfor bclients bat bthe blowest bcost.
(b) bPerform bwork bfor bthe bclients bwith bcompetence
and bdiligence.
(c) bComplete beach byear ba bspecified bnumber bof
hours bof bContinuing bProfessional bEducation
courses. b- bcorrect banswers✔✔(b) bis bcorrect. bArticle bV brequires ba bmember bto bper-
form bhis bprofessional bwork bwith bcompetence band bdiligence.
(a) bThe bPrinciples bdo bnot baddress bthe bsubject bof bfees bor
(c) bContinuing bProfessional bEducation.
Jones b& bBarnes, ba bpublic baccounting bfirm, bhas boffices
in bMinneapolis, bChicago band b10 bother bcities. bThe bfirm b's
executive boffice band bthe bmanaging bpartner bare bin bChicago.
Each boffice bdoes ball bthe bwork band bissues bthe baudit breports
for bthe bclients bof bthat boffice. bBlack b& bCo. bis ban baudit bclient
of bthe bMinneapolis boffice.
State bwhether bin bthe bfollowing bsituations bthe bindividual
would bbe ba b"covered bmember" bwith brespect bto bthe b2001
calendar byear baudit bof bBlack b& bCo.
Gilbert b, ba btax bpartner bin bthe bChicago boffice
(a) bis ba bcovered bmember.
