, CTEC Ethics Q&A Bank 2026 | Exam Success Guide | Graded A+
1. Arnie is a Certified Public Accountant who prepares income tax returns for his
clients. One of his clients submitted a list of expenses to be claimed on
Schedule C of the tax return. Arnie qualifies as a return preparer and, as such,
is required to comply with which one of the following conditions?
Arnie is required to independently verify the client's information.
Arnie can ignore implications of information known by him.
Appropriate inquiries are required to determine whether the client
has substantiation for travel and entertainment expenses.
Inquiry is not required if the information appears to be incorrect or
incomplete.
2. According to Circular 230, in general, a practitioner must apply due diligence
when performing the following duties
In preparing of assisting the preparation, approving, and filing of tax
returns, documents, affidavits and other papers relating to IRS matters
In determining the correctness of oral or written representations
made by the tax practitioner to the Department of the Treasury
In determining the correctness of oral or written representations
made by the practitioner to clients with reference to any matter
administered by the IRS
All the above
3. If a tax preparer in California fails to complete the required continuing
education, what consequence might they face?
They will be fined but can maintain their registration.
1. Arnie is a Certified Public Accountant who prepares income tax returns for his
clients. One of his clients submitted a list of expenses to be claimed on
Schedule C of the tax return. Arnie qualifies as a return preparer and, as such,
is required to comply with which one of the following conditions?
Arnie is required to independently verify the client's information.
Arnie can ignore implications of information known by him.
Appropriate inquiries are required to determine whether the client
has substantiation for travel and entertainment expenses.
Inquiry is not required if the information appears to be incorrect or
incomplete.
2. According to Circular 230, in general, a practitioner must apply due diligence
when performing the following duties
In preparing of assisting the preparation, approving, and filing of tax
returns, documents, affidavits and other papers relating to IRS matters
In determining the correctness of oral or written representations
made by the tax practitioner to the Department of the Treasury
In determining the correctness of oral or written representations
made by the practitioner to clients with reference to any matter
administered by the IRS
All the above
3. If a tax preparer in California fails to complete the required continuing
education, what consequence might they face?
They will be fined but can maintain their registration.
