Missouri Certified Public Accountant
Ethics Exam Practice Questions And
Correct Answers (Verified Answers) Plus
Rationales 2026 Q&A | Instant
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1. A CPA discovers that a client’s financial statements contain a material
misstatement that management refuses to correct. According to
professional ethics standards, the CPA should most likely:
A. Ignore the issue if management accepts responsibility
B. Issue an unmodified opinion because the statements are management’s
responsibility
C. Withdraw from the engagement without documenting concerns
D. Modify the audit opinion or withdraw from the engagement if necessary
The CPA has a duty to protect the public interest and maintain professional
integrity. If management refuses to correct a material misstatement, the
auditor must issue a modified opinion or consider withdrawal.
, 2. Independence in fact primarily refers to:
A. Avoiding lawsuits from clients
B. Compliance with tax regulations
C. Maintaining an unbiased mental attitude
D. Preparing financial statements accurately
Independence in fact means the CPA remains objective and impartial in
judgment regardless of external pressures or relationships.
3. Which of the following situations most likely impairs a CPA’s
independence?
A. Providing bookkeeping services for a nonattest client
B. Receiving fixed audit fees annually
C. Owning stock in an audit client
D. Attending a professional conference with a client
Financial interests in an attest client create self-interest threats that impair
independence under professional standards.
4. A CPA knowingly signs a tax return containing false deductions. This
conduct violates the ethical principle of:
A. Due care
B. Confidentiality
,C. Scope and nature of services
D. Integrity
Integrity requires honesty and candor. Knowingly submitting false
information breaches this fundamental ethical principle.
5. The primary purpose of the AICPA Code of Professional Conduct is to:
A. Increase CPA firm profitability
B. Replace state licensing laws
C. Provide ethical guidance and enforce professional responsibilities
D. Eliminate all litigation risks
The AICPA Code establishes ethical standards that guide CPAs in fulfilling
professional obligations and maintaining public trust.
6. Which threat occurs when a CPA audits financial statements that the
CPA previously prepared?
A. Advocacy threat
B. Familiarity threat
C. Self-review threat
D. Undue influence threat
A self-review threat arises when a CPA evaluates work they previously
performed, reducing objectivity.
, 7. A CPA reveals confidential client information without consent. Which
of the following is generally an acceptable exception?
A. To gain competitive advantage
B. To discuss the client casually with friends
C. To disclose information for marketing purposes
D. To comply with a valid court subpoena
Confidential information may be disclosed when legally required, such as
through a subpoena or regulatory investigation.
8. Due professional care requires a CPA to:
A. Guarantee accurate financial statements
B. Perform services regardless of competence
C. Exercise competence and diligence in professional services
D. Follow client instructions without question
Due professional care requires CPAs to perform work competently,
diligently, and according to applicable standards.
9. Which of the following best describes objectivity?
A. Loyalty to management
B. Maximizing client satisfaction
C. Maintaining impartiality and avoiding conflicts of interest
D. Delegating all responsibilities to staff
Ethics Exam Practice Questions And
Correct Answers (Verified Answers) Plus
Rationales 2026 Q&A | Instant
Download Pdf
1. A CPA discovers that a client’s financial statements contain a material
misstatement that management refuses to correct. According to
professional ethics standards, the CPA should most likely:
A. Ignore the issue if management accepts responsibility
B. Issue an unmodified opinion because the statements are management’s
responsibility
C. Withdraw from the engagement without documenting concerns
D. Modify the audit opinion or withdraw from the engagement if necessary
The CPA has a duty to protect the public interest and maintain professional
integrity. If management refuses to correct a material misstatement, the
auditor must issue a modified opinion or consider withdrawal.
, 2. Independence in fact primarily refers to:
A. Avoiding lawsuits from clients
B. Compliance with tax regulations
C. Maintaining an unbiased mental attitude
D. Preparing financial statements accurately
Independence in fact means the CPA remains objective and impartial in
judgment regardless of external pressures or relationships.
3. Which of the following situations most likely impairs a CPA’s
independence?
A. Providing bookkeeping services for a nonattest client
B. Receiving fixed audit fees annually
C. Owning stock in an audit client
D. Attending a professional conference with a client
Financial interests in an attest client create self-interest threats that impair
independence under professional standards.
4. A CPA knowingly signs a tax return containing false deductions. This
conduct violates the ethical principle of:
A. Due care
B. Confidentiality
,C. Scope and nature of services
D. Integrity
Integrity requires honesty and candor. Knowingly submitting false
information breaches this fundamental ethical principle.
5. The primary purpose of the AICPA Code of Professional Conduct is to:
A. Increase CPA firm profitability
B. Replace state licensing laws
C. Provide ethical guidance and enforce professional responsibilities
D. Eliminate all litigation risks
The AICPA Code establishes ethical standards that guide CPAs in fulfilling
professional obligations and maintaining public trust.
6. Which threat occurs when a CPA audits financial statements that the
CPA previously prepared?
A. Advocacy threat
B. Familiarity threat
C. Self-review threat
D. Undue influence threat
A self-review threat arises when a CPA evaluates work they previously
performed, reducing objectivity.
, 7. A CPA reveals confidential client information without consent. Which
of the following is generally an acceptable exception?
A. To gain competitive advantage
B. To discuss the client casually with friends
C. To disclose information for marketing purposes
D. To comply with a valid court subpoena
Confidential information may be disclosed when legally required, such as
through a subpoena or regulatory investigation.
8. Due professional care requires a CPA to:
A. Guarantee accurate financial statements
B. Perform services regardless of competence
C. Exercise competence and diligence in professional services
D. Follow client instructions without question
Due professional care requires CPAs to perform work competently,
diligently, and according to applicable standards.
9. Which of the following best describes objectivity?
A. Loyalty to management
B. Maximizing client satisfaction
C. Maintaining impartiality and avoiding conflicts of interest
D. Delegating all responsibilities to staff
