AICPA ETHICS ACTUAL FINALS QUESTIONS AND
ANSWERS SURE A+
✔✔Hana receives tickets to Hamilton from one of her company's largest vendors. The
gift included a card that congratulated her on a recent promotion. In determining
whether accepting the gift would create a significant threat to her compliance with the
AICPA code, what factor should she most consider?
A. Whether she disclosed the receipt of the gift to the board of directors
B. Whether she truly earned the gift
C. Whether the gift is reasonable in the circumstances
D. Whether the tickets cost more than $100 - ✔✔C. Whether the gift is reasonable in
the circumstances
The key thing we learned about the ethics of receiving gifts as CPAs is whether the gift
was reasonable in the circumstances. By reasonable, would the gift impact our
judgement in the future or cause us to give that vendor special treatment? If the vendor
pays for a dinner to discuss business that's one thing (probably reasonable), but if it's
something that would cause your objectivity to be impaired, then you shouldn't accept
the gift. It could be a $5 or $500 gift, but if you feel like you now "owe" the vendor
something in return, you should decline the gift.
✔✔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 - ✔✔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.
, ✔✔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 - ✔✔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 - ✔✔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
B. Audits of financial statements
C. Reviews of financial statements
D. Financial planning - ✔✔D. Financial planning
Independence is not required for financial planning engagements.
✔✔On October 11, 2017, ROC Accountants signed an engagement letter to begin
auditing XYZ Corp for the 12-month period ended 12/31/17. Audit planning is scheduled
to commence on 11/4/17. What is the earliest date on which ROC would be required to
be independent of XYZ?
A. January 1, 2017
B. October 11, 2017
C. November 4, 2017
D. December 31, 2017 - ✔✔A. January 1, 2017
Return on Capital (ROC) should be independent for the period of profession
engagement and the period covered by the financial statements. If ROC had certain
business relationships during the period they will audit, their independence may be
considered impaired.
✔✔A new staff accountant obtains an automobile loan under normal term and
conditions from an audit client to purchase a BW sports car. The car is material to his
net worth; it is his net worth as is the amount borrowed. He is a covered member of the
lender. Did this loan impair independence?
A. No, because it is fully secured (collateralized) by the automobile
ANSWERS SURE A+
✔✔Hana receives tickets to Hamilton from one of her company's largest vendors. The
gift included a card that congratulated her on a recent promotion. In determining
whether accepting the gift would create a significant threat to her compliance with the
AICPA code, what factor should she most consider?
A. Whether she disclosed the receipt of the gift to the board of directors
B. Whether she truly earned the gift
C. Whether the gift is reasonable in the circumstances
D. Whether the tickets cost more than $100 - ✔✔C. Whether the gift is reasonable in
the circumstances
The key thing we learned about the ethics of receiving gifts as CPAs is whether the gift
was reasonable in the circumstances. By reasonable, would the gift impact our
judgement in the future or cause us to give that vendor special treatment? If the vendor
pays for a dinner to discuss business that's one thing (probably reasonable), but if it's
something that would cause your objectivity to be impaired, then you shouldn't accept
the gift. It could be a $5 or $500 gift, but if you feel like you now "owe" the vendor
something in return, you should decline the gift.
✔✔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 - ✔✔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.
, ✔✔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 - ✔✔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 - ✔✔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
B. Audits of financial statements
C. Reviews of financial statements
D. Financial planning - ✔✔D. Financial planning
Independence is not required for financial planning engagements.
✔✔On October 11, 2017, ROC Accountants signed an engagement letter to begin
auditing XYZ Corp for the 12-month period ended 12/31/17. Audit planning is scheduled
to commence on 11/4/17. What is the earliest date on which ROC would be required to
be independent of XYZ?
A. January 1, 2017
B. October 11, 2017
C. November 4, 2017
D. December 31, 2017 - ✔✔A. January 1, 2017
Return on Capital (ROC) should be independent for the period of profession
engagement and the period covered by the financial statements. If ROC had certain
business relationships during the period they will audit, their independence may be
considered impaired.
✔✔A new staff accountant obtains an automobile loan under normal term and
conditions from an audit client to purchase a BW sports car. The car is material to his
net worth; it is his net worth as is the amount borrowed. He is a covered member of the
lender. Did this loan impair independence?
A. No, because it is fully secured (collateralized) by the automobile
