AICPA Ethics Code Exam Latest Update 2025-
2026 Actual Exam 55 Questions with 100%
Verified Correct Answers Guaranteed A+ Verified
by Professor
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).
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
B. No, if it was used to purchase a foreign car
C. Yes, because it is material to the staff's net worth
D. Yes, if the sticker price exceeds $40,000 - CORRECT ANSWER: A. No, because it is
fully secured (collateralized) by the automobile
An auto loan does not impair independence if it is obtained under the lender's normal
terms and conditions and is fully secured by the vehicle. Car loans that are fully secured
,(collateralized) is a permitted loan that is an exception to the independence rules (See
slide 13).
A staff member has a credit card from an attest client with respect to which he is a
covered member. The balance on his current credit card statement is $10,100 and is
material to his net worth. Does this impair independence?
A. No, because credit card loans do not create threats to independence
B. No, because the staff member rarely uses the credit card
C. Yes, because the month purchases are material to the staff person's net worth
D. Yes, if the staff person does not. maintain a current balance of $10,000 or less -
CORRECT ANSWER: D. Yes, if the staff person does not maintain a current balance of
$10,000 or less
If the stand maintains a balance of $10,000 or less on a current basis, taking in to
consideration the payment due date and any available grace period, the loan does not
impair independence. See slide 13 - since the amount is over $10,000 independence
would be impaired
A tax partner obtained a personal loan from a business associate in 2010. In 2014, the
business associate became a director of the partner's client which is also an audit client
of the firm. Does this loan impair independence?
A. Probably, because she is aware of the situation, the partner should evaluate the loan
under the conceptual framework
B. Yes, the partner should renegotiate the loan as soon as possible
C. No, because the lender is a colleague, not an attest client
D. No, because the partner acquired the loan before the lender became a director of an
audit client - CORRECT ANSWER: A. Probably, because she is aware of the situation,
the partner should evaluate the loan under the conceptual framework
When aware, a covered member should evaluate possible threats to independence
caused by a lending relationship with an officer, director, or 10% or greater shareholder
of an audit client's affiliate.
, Alf & Company, CPAs decides to subcontract a portion of its tax return preparation work
to Dee Howard (DH) Tax Preparation Services, an unaffiliated income tax service
provider. What does Alf & Company need to do to outsource the tax work?
I Ensure that DH is current in its income tax obligations
II. Ensure that DH has appropriate controls in place to protect the confidentiality of the
client data
III. Disclose to the client that services may be performed by DH
IV. Have a contractual agreement with DH to protect the confidentiality of client
information
A. I, II, and III are required
B. II, III, and IV are required
C. III and IV are required
D . All of the items are required - CORRECT ANSWER: B. II, III, and IV are required
The firm needs to take certain steps to protect client confidentiality, including a
contractual agreement, and to inform the client that a third-party service provider may
be used.
As a professional CPA, I have a responsibility to maintain and broaden public
confidence by performing all my responsibilities with:
A. Integrity
B. Speed
C. Agility
D. Perfection - CORRECT ANSWER: A. Integrity
Integrity is one of the cornerstones of our profession.
As a professional CPA, I have the greatest responsibility to serve:
A. My clients
B. My best interest
C. The public's interest
2026 Actual Exam 55 Questions with 100%
Verified Correct Answers Guaranteed A+ Verified
by Professor
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).
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
B. No, if it was used to purchase a foreign car
C. Yes, because it is material to the staff's net worth
D. Yes, if the sticker price exceeds $40,000 - CORRECT ANSWER: A. No, because it is
fully secured (collateralized) by the automobile
An auto loan does not impair independence if it is obtained under the lender's normal
terms and conditions and is fully secured by the vehicle. Car loans that are fully secured
,(collateralized) is a permitted loan that is an exception to the independence rules (See
slide 13).
A staff member has a credit card from an attest client with respect to which he is a
covered member. The balance on his current credit card statement is $10,100 and is
material to his net worth. Does this impair independence?
A. No, because credit card loans do not create threats to independence
B. No, because the staff member rarely uses the credit card
C. Yes, because the month purchases are material to the staff person's net worth
D. Yes, if the staff person does not. maintain a current balance of $10,000 or less -
CORRECT ANSWER: D. Yes, if the staff person does not maintain a current balance of
$10,000 or less
If the stand maintains a balance of $10,000 or less on a current basis, taking in to
consideration the payment due date and any available grace period, the loan does not
impair independence. See slide 13 - since the amount is over $10,000 independence
would be impaired
A tax partner obtained a personal loan from a business associate in 2010. In 2014, the
business associate became a director of the partner's client which is also an audit client
of the firm. Does this loan impair independence?
A. Probably, because she is aware of the situation, the partner should evaluate the loan
under the conceptual framework
B. Yes, the partner should renegotiate the loan as soon as possible
C. No, because the lender is a colleague, not an attest client
D. No, because the partner acquired the loan before the lender became a director of an
audit client - CORRECT ANSWER: A. Probably, because she is aware of the situation,
the partner should evaluate the loan under the conceptual framework
When aware, a covered member should evaluate possible threats to independence
caused by a lending relationship with an officer, director, or 10% or greater shareholder
of an audit client's affiliate.
, Alf & Company, CPAs decides to subcontract a portion of its tax return preparation work
to Dee Howard (DH) Tax Preparation Services, an unaffiliated income tax service
provider. What does Alf & Company need to do to outsource the tax work?
I Ensure that DH is current in its income tax obligations
II. Ensure that DH has appropriate controls in place to protect the confidentiality of the
client data
III. Disclose to the client that services may be performed by DH
IV. Have a contractual agreement with DH to protect the confidentiality of client
information
A. I, II, and III are required
B. II, III, and IV are required
C. III and IV are required
D . All of the items are required - CORRECT ANSWER: B. II, III, and IV are required
The firm needs to take certain steps to protect client confidentiality, including a
contractual agreement, and to inform the client that a third-party service provider may
be used.
As a professional CPA, I have a responsibility to maintain and broaden public
confidence by performing all my responsibilities with:
A. Integrity
B. Speed
C. Agility
D. Perfection - CORRECT ANSWER: A. Integrity
Integrity is one of the cornerstones of our profession.
As a professional CPA, I have the greatest responsibility to serve:
A. My clients
B. My best interest
C. The public's interest
