AICPA Code of Ethics exam questions
with answers
Effective Date - ➰CORRECT ANSWERS ✔✔December 15th, 2014
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. - ➰CORRECT ANSWERS ✔✔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 -
➰CORRECT ANSWERS ✔✔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 -
➰CORRECT ANSWERS ✔✔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] - ➰CORRECT ANSWERS ✔✔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. - ➰CORRECT ANSWERS ✔✔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] - ➰CORRECT ANSWERS ✔✔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
who owns 10 percent or more of the attest client's outstanding equity
securities. [1.260.010]
c. A member or his or her firm relies excessively on revenue from a single attest
client.
d. A member or member's firm has a material joint venture or other material
joint business arrangement
with the attest client. [1.265] - ➰CORRECT ANSWERS ✔✔self interest threat
threat that a member will not appropriately evaluate the results of a previous
judgment made or service performed or supervised by the member or an
individual in the member's firm
with answers
Effective Date - ➰CORRECT ANSWERS ✔✔December 15th, 2014
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. - ➰CORRECT ANSWERS ✔✔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 -
➰CORRECT ANSWERS ✔✔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 -
➰CORRECT ANSWERS ✔✔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] - ➰CORRECT ANSWERS ✔✔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. - ➰CORRECT ANSWERS ✔✔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] - ➰CORRECT ANSWERS ✔✔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
who owns 10 percent or more of the attest client's outstanding equity
securities. [1.260.010]
c. A member or his or her firm relies excessively on revenue from a single attest
client.
d. A member or member's firm has a material joint venture or other material
joint business arrangement
with the attest client. [1.265] - ➰CORRECT ANSWERS ✔✔self interest threat
threat that a member will not appropriately evaluate the results of a previous
judgment made or service performed or supervised by the member or an
individual in the member's firm
