OREGON ACCOUNTANCY ETHICS EXAM – QUESTIONS AND ANSWERS |
VERIFIED AND WELL DETAILED ANSWERS | PLUS RATIONALES | GUARANTEED
PASS | LATEST EXAM UPDATE
Core Domains
Professional Conduct and Ethical Principles *
AICPA Code of Professional Conduct *
Oregon Administrative Rules (OAR Chapter 801) *
Independence, Integrity, and Objectivity *
Threats, Safeguards, and the Conceptual Framework *
Confidentiality and Client Records *
Noncompliance with Laws and Regulations (NOCLAR) *
Professional Misconduct and Disciplinary Actions *
CPE Requirements and Continuing Professional Competence *
Business Transactions, Conflicts of Interest, and Fees *
Introduction
The Oregon Accountancy Ethics Exam assesses a candidate’s knowledge and
application of the ethical standards governing the accounting profession. The
examination covers the AICPA Code of Professional Conduct, Oregon Administrative
Rules, and the fundamental principles of integrity, objectivity, and independence.
Multiple-choice and scenario-based questions require candidates to demonstrate
critical thinking, professional judgment, and practical decision-making in realistic
professional situations. This assessment ensures that candidates understand their
responsibilities to the public interest, regulatory authorities, and the profession.
Emphasis is placed on applying ethical reasoning to complex circumstances,
identifying threats to compliance, and selecting appropriate safeguards or courses of
action.
,SECTION ONE: QUESTIONS 1–50
1. Which of the following best describes the primary purpose of the AICPA Code
of Professional Conduct?
A. To establish maximum fee schedules for accounting services
B. To provide guidance and rules to all members in the performance of
professional responsibilities
C. To replace state board of accountancy regulations
D. To guarantee client satisfaction with accounting services
🟢 Correct Answer: B. To provide guidance and rules to all members in the
performance of professional responsibilities
🔴 Rationale: The AICPA Code of Professional Conduct provides principles and
rules that guide members in fulfilling their professional responsibilities, including
service to the public interest and maintaining the profession’s reputation.
2. A CPA in public practice discovers that a client has engaged in illegal activity
that has a direct effect on the client’s financial statements. According to the
AICPA NOCLAR interpretation, what is the CPA’s primary objective?
A. Immediately resign from the engagement without discussion
B. Alert management or those charged with governance to enable them to rectify
or mitigate the consequences
C. Report the matter directly to law enforcement without informing the client
D. Ignore the matter because it is outside the scope of the engagement
🟢 Correct Answer: B. Alert management or those charged with governance to
enable them to rectify or mitigate the consequences
,🔴 Rationale: The NOCLAR interpretation establishes that a member’s objectives
include alerting management or those charged with governance to enable them
to address the noncompliance, while complying with applicable laws and the
Integrity and Objectivity Rule.
3. Under Oregon Administrative Rule 801-040-0010, how many hours of ethics
CPE must an active licensee complete each biennial renewal period?
A. Two hours
B. Four hours
C. Eight hours
D. Sixteen hours
🟢 Correct Answer: B. Four hours
🔴 Rationale: Oregon requires all active and inactive licensees to complete four
hours of ethics CPE each biennial renewal period as specified in OAR 801-040-
0010.
4. A CPA serves as a director of a local bank. Several of the CPA’s audit clients
are customers of the bank. Under the AICPA Code, what threat to compliance
with the Integrity and Objectivity Rule is most likely created?
A. Self-review threat
B. Adverse interest threat
C. Undue influence threat
D. Familiarity threat
🟢 Correct Answer: B. Adverse interest threat
, 🔴 Rationale: The AICPA Code identifies that serving as a director of an entity may
create an adverse interest threat when the member’s clients are customers of the
entity or likely to engage in significant transactions with it.
5. A CPA has been asked by a client to backdate an engagement letter to make
it appear that the engagement began in a prior period. What should the CPA
do?
A. Comply with the request if the client is a longstanding client
B. Refuse to backdate the letter because it would constitute a knowing
misrepresentation
C. Backdate the letter but disclose the action to the AICPA
D. Ask the client to provide a written justification for the request
🟢 Correct Answer: B. Refuse to backdate the letter because it would constitute a
knowing misrepresentation
🔴 Rationale: The Integrity and Objectivity Rule prohibits members from
knowingly misrepresenting facts. Backdating an engagement letter would be a
knowing misrepresentation and violate the Rule.
6. Which of the following is an example of a self-interest threat to a CPA’s
independence?
A. A CPA’s firm provides bookkeeping services to an audit client
B. A CPA has a direct financial interest in an audit client
C. A CPA has a close family member employed by an audit client in a non-key
position
D. A CPA previously served as an employee of the audit client
VERIFIED AND WELL DETAILED ANSWERS | PLUS RATIONALES | GUARANTEED
PASS | LATEST EXAM UPDATE
Core Domains
Professional Conduct and Ethical Principles *
AICPA Code of Professional Conduct *
Oregon Administrative Rules (OAR Chapter 801) *
Independence, Integrity, and Objectivity *
Threats, Safeguards, and the Conceptual Framework *
Confidentiality and Client Records *
Noncompliance with Laws and Regulations (NOCLAR) *
Professional Misconduct and Disciplinary Actions *
CPE Requirements and Continuing Professional Competence *
Business Transactions, Conflicts of Interest, and Fees *
Introduction
The Oregon Accountancy Ethics Exam assesses a candidate’s knowledge and
application of the ethical standards governing the accounting profession. The
examination covers the AICPA Code of Professional Conduct, Oregon Administrative
Rules, and the fundamental principles of integrity, objectivity, and independence.
Multiple-choice and scenario-based questions require candidates to demonstrate
critical thinking, professional judgment, and practical decision-making in realistic
professional situations. This assessment ensures that candidates understand their
responsibilities to the public interest, regulatory authorities, and the profession.
Emphasis is placed on applying ethical reasoning to complex circumstances,
identifying threats to compliance, and selecting appropriate safeguards or courses of
action.
,SECTION ONE: QUESTIONS 1–50
1. Which of the following best describes the primary purpose of the AICPA Code
of Professional Conduct?
A. To establish maximum fee schedules for accounting services
B. To provide guidance and rules to all members in the performance of
professional responsibilities
C. To replace state board of accountancy regulations
D. To guarantee client satisfaction with accounting services
🟢 Correct Answer: B. To provide guidance and rules to all members in the
performance of professional responsibilities
🔴 Rationale: The AICPA Code of Professional Conduct provides principles and
rules that guide members in fulfilling their professional responsibilities, including
service to the public interest and maintaining the profession’s reputation.
2. A CPA in public practice discovers that a client has engaged in illegal activity
that has a direct effect on the client’s financial statements. According to the
AICPA NOCLAR interpretation, what is the CPA’s primary objective?
A. Immediately resign from the engagement without discussion
B. Alert management or those charged with governance to enable them to rectify
or mitigate the consequences
C. Report the matter directly to law enforcement without informing the client
D. Ignore the matter because it is outside the scope of the engagement
🟢 Correct Answer: B. Alert management or those charged with governance to
enable them to rectify or mitigate the consequences
,🔴 Rationale: The NOCLAR interpretation establishes that a member’s objectives
include alerting management or those charged with governance to enable them
to address the noncompliance, while complying with applicable laws and the
Integrity and Objectivity Rule.
3. Under Oregon Administrative Rule 801-040-0010, how many hours of ethics
CPE must an active licensee complete each biennial renewal period?
A. Two hours
B. Four hours
C. Eight hours
D. Sixteen hours
🟢 Correct Answer: B. Four hours
🔴 Rationale: Oregon requires all active and inactive licensees to complete four
hours of ethics CPE each biennial renewal period as specified in OAR 801-040-
0010.
4. A CPA serves as a director of a local bank. Several of the CPA’s audit clients
are customers of the bank. Under the AICPA Code, what threat to compliance
with the Integrity and Objectivity Rule is most likely created?
A. Self-review threat
B. Adverse interest threat
C. Undue influence threat
D. Familiarity threat
🟢 Correct Answer: B. Adverse interest threat
, 🔴 Rationale: The AICPA Code identifies that serving as a director of an entity may
create an adverse interest threat when the member’s clients are customers of the
entity or likely to engage in significant transactions with it.
5. A CPA has been asked by a client to backdate an engagement letter to make
it appear that the engagement began in a prior period. What should the CPA
do?
A. Comply with the request if the client is a longstanding client
B. Refuse to backdate the letter because it would constitute a knowing
misrepresentation
C. Backdate the letter but disclose the action to the AICPA
D. Ask the client to provide a written justification for the request
🟢 Correct Answer: B. Refuse to backdate the letter because it would constitute a
knowing misrepresentation
🔴 Rationale: The Integrity and Objectivity Rule prohibits members from
knowingly misrepresenting facts. Backdating an engagement letter would be a
knowing misrepresentation and violate the Rule.
6. Which of the following is an example of a self-interest threat to a CPA’s
independence?
A. A CPA’s firm provides bookkeeping services to an audit client
B. A CPA has a direct financial interest in an audit client
C. A CPA has a close family member employed by an audit client in a non-key
position
D. A CPA previously served as an employee of the audit client
