AICPA ETHICS CODE EXAM QUESTIONS AND VERIFIED
ANSWERS GRADED A+ 2025
Which phrase is used by the Code of Professional Conduct to describe integrity?
A. Forceful advocate of the client's position
B. Valued. business adviser to the client
C. Willing to do what it takes to achieve a proper outcome
D. Candid, within the constraints of client confidentiality -
✔✔✔ Correct Answer > D. Candid, within the constraints of client confidentiality
We learned in a previous lesson that integrity means being honest or "candid" - the
opposite of being sneaky or misleading. Integrity is doing the right thing being honest
even if no one is necessarily holding you to that standard. However, as professionals, we
also need to be concerned about client confidentiality. We shouldn't be so honest that
we disclose any information about our clients that is not public. So the best answer is to
be candid, within the constraints of client confidentiality. The other answer choices do not
necessarily describe someone with integrity.
Status Photos wants to engage Daily CPAs as their auditors for the year ended 12/31/18.
What must happen under PCAOB Rule 3526?
A. Daily must explicitly state that all covered persons in the firm have complied with
relevant ethical requirements
B. Daily must provide a list of all firm members who met be independent of client
,C. Daily must describe in writing all the relationships with Status Photos that may
reasonably be expected to affect their independence
D. Daily must provide the results of independence investigations for all persons who may
work on the engagement - ✔✔✔ Correct Answer > C. Daily must describe in writing all
the relationships with Status Photos that may reasonably be expected to affect their
independence
Auditors are required to communicate in writing with Status Photo's audit committee a
description of all relationships that Daily believes may reasonably be though to affect
their independence. This provides the audit committee an opportunity to prove their
input on whether or not they believe the matter would impact the firm's independence
A manager obtained her MBA prior to joining the firm 2013. While going to school, she
obtained student loans under the lenders normal terms and conditions that are not
material to her net worth. She is a covered member of the lender that made the loan.
Does this loan impair independence?
A. No, because the money way used to obtain a student loan
B. No, because the loan is not material to the managers net worth and was obtained prior
to her joining the firm
C. Yes, if the manager obtained it within 5 years of joining the firm
D. Yes, because the manager is a covered member - ✔✔✔ Correct Answer > B. No,
because the loan is not material to the manager's net worth and was obtained prior to
her joining the firm
A grandfathered and or covered member loan does not impair independence if the loan
is immaterial to her net worth and she meets the other requirements for grandfathering.
Certain grandfathered loans are an exception to the independence rules (see slide 14).
, Linda has two young children and is a covered member with respect to ABC Company.
When will her children no longer be considered immediate family?
A. When they turn 18
B. When they get married
C. When they are no longer her dependents
D. When they are no longer students - ✔✔✔ Correct Answer > C. When they are no
longer dependents
Children who are no longer dependent cease to be immediate family under the rules.
Doris George is a covered member with respect to Dorian Inc. Who must also comply
with the independence rules?
A. Doris's former spouse, Frank
B. Doris's friend Ana - Doris provides over half of Ana's financial support
C. Doris's first cousin, Louis
D. Doris's son, who is married - ✔✔✔ Correct Answer > B. Doris's friend Ana - Doris
provides over half of Ana's financial support
The independence rules apply to the covered member, his or her spouse (whether or not
a dependent), and other dependents (whether or not related).
Which is not considered an attest engagement under the AICPA independence rules?
A. Services rendered under the attestation standards
ANSWERS GRADED A+ 2025
Which phrase is used by the Code of Professional Conduct to describe integrity?
A. Forceful advocate of the client's position
B. Valued. business adviser to the client
C. Willing to do what it takes to achieve a proper outcome
D. Candid, within the constraints of client confidentiality -
✔✔✔ Correct Answer > D. Candid, within the constraints of client confidentiality
We learned in a previous lesson that integrity means being honest or "candid" - the
opposite of being sneaky or misleading. Integrity is doing the right thing being honest
even if no one is necessarily holding you to that standard. However, as professionals, we
also need to be concerned about client confidentiality. We shouldn't be so honest that
we disclose any information about our clients that is not public. So the best answer is to
be candid, within the constraints of client confidentiality. The other answer choices do not
necessarily describe someone with integrity.
Status Photos wants to engage Daily CPAs as their auditors for the year ended 12/31/18.
What must happen under PCAOB Rule 3526?
A. Daily must explicitly state that all covered persons in the firm have complied with
relevant ethical requirements
B. Daily must provide a list of all firm members who met be independent of client
,C. Daily must describe in writing all the relationships with Status Photos that may
reasonably be expected to affect their independence
D. Daily must provide the results of independence investigations for all persons who may
work on the engagement - ✔✔✔ Correct Answer > C. Daily must describe in writing all
the relationships with Status Photos that may reasonably be expected to affect their
independence
Auditors are required to communicate in writing with Status Photo's audit committee a
description of all relationships that Daily believes may reasonably be though to affect
their independence. This provides the audit committee an opportunity to prove their
input on whether or not they believe the matter would impact the firm's independence
A manager obtained her MBA prior to joining the firm 2013. While going to school, she
obtained student loans under the lenders normal terms and conditions that are not
material to her net worth. She is a covered member of the lender that made the loan.
Does this loan impair independence?
A. No, because the money way used to obtain a student loan
B. No, because the loan is not material to the managers net worth and was obtained prior
to her joining the firm
C. Yes, if the manager obtained it within 5 years of joining the firm
D. Yes, because the manager is a covered member - ✔✔✔ Correct Answer > B. No,
because the loan is not material to the manager's net worth and was obtained prior to
her joining the firm
A grandfathered and or covered member loan does not impair independence if the loan
is immaterial to her net worth and she meets the other requirements for grandfathering.
Certain grandfathered loans are an exception to the independence rules (see slide 14).
, Linda has two young children and is a covered member with respect to ABC Company.
When will her children no longer be considered immediate family?
A. When they turn 18
B. When they get married
C. When they are no longer her dependents
D. When they are no longer students - ✔✔✔ Correct Answer > C. When they are no
longer dependents
Children who are no longer dependent cease to be immediate family under the rules.
Doris George is a covered member with respect to Dorian Inc. Who must also comply
with the independence rules?
A. Doris's former spouse, Frank
B. Doris's friend Ana - Doris provides over half of Ana's financial support
C. Doris's first cousin, Louis
D. Doris's son, who is married - ✔✔✔ Correct Answer > B. Doris's friend Ana - Doris
provides over half of Ana's financial support
The independence rules apply to the covered member, his or her spouse (whether or not
a dependent), and other dependents (whether or not related).
Which is not considered an attest engagement under the AICPA independence rules?
A. Services rendered under the attestation standards
