AICPA FINAL, Ethics Final, ACCT 4553 Ethics Final Part 5, Ethics Final
UPDATED ACTUAL Questions and CORRECT Answers
1. What are the 10 steps in the ethical deci- Step One: Recognize the Ethical Issue
sion making model? Step Two: Gather the Critical Facts
Step Three: Identify the Stakeholders
Step Four: Consider Alternatives
Step Five: Consider the Effect on Stakehold-
ers
Step Six: Consider Your Comfort Level
Step Seven: Consider Rules, Regulations, and
Laws
Step Eight: Make a Decision
Step Nine: Document your Efforts
Step Ten: Evaluate the Outcome
2. What does recognizing a potential ethical
issue look like?
3. What does considering your comfort level Ask yourself "If I had to discuss your decision
look like? in public, would you be concerned about it
reflects on your ethics?"
4. What is the difference between the AIC- The AICPA is the national professional organi-
PA, SEC, PCAOB, and your state board of zation for CPAs. AICPA provides resources and
public accountancy? information to members and coordinate ac-
tivities with state CPA societies. SEC empow-
ered by congress to regulate financial report-
ing of PUBLICLY-held companies. SEC estab-
lishes and enforces rules on accounting and
auditing (including auditor independence).
PCAOB (created by SOX and overseen by SEC)
establish rules with respect to auditing and
other attestation engagements, quality con-
, trol of audits, and independence of public
auditors. State Board issues CPA license and
are frontline for oversight on ethical behav-
ior. Can create state ethics codes (can create
separate ones, or incorporate AICPA rules).
Must follow state board rules for state they
are licensed in.
5. What is the new structure of the AICPA Preface - overview, principles, and defini-
Ethics codification? tions)
Part 1 - rules related to those in public prac-
tice, conceptual framework on independence
and other rules on ethical conflicts
Part 2 - Rules and interpretations applicable
to members in business (private practice)
Part 3 - Rules and interpretations applicable
to all other members (retired, between jobs,
etc.)
6. What are the 4 sections of the AICPA Pretty sure it's just this again (looked it up and
Ethics codification? this is what I got everywhere I looked)
1. Preface - overview, principles, and defini-
tions
2. Part 1 - Rules related to those in public
practice, conceptual framework on indepen-
dence and other rules, guidance on ethical
conflict resolution
3. Part 2 - Rules and interpretations applic-
able to members in business (private prac-
, tice)
4. Part 3 - Rules and interpretations applic-
able to all other members (retired, between
jobs, etc.)
7. What are the 6 pillars/principles of the (1) responsibilities - In carrying out your pro-
code and what do each mean? fessional responsibilities, you should exer-
cise sensitive professional and moral judg-
ment
(2) serve the public interest - You should act
in a way that will serve the public interest,
honor the public trust, and demonstrate your
commitment to professionalism
(3) integrity - To maintain and broaden public
confidence, you should perform all profes-
sional responsibilities with the highest sense
of integrity (being honest even when no one
is looking or "above reproach").
(4) objectivity and independence - You
should maintain objectivity and be free from
conflicts of interest in discharging your pro-
fessional duties.
(5) due care and - You should observe the
profession's technical and ethical standards,
strive continually to improve competence and
the quality of services, and discharge pro-
fessional responsibility to the best of your
ability.
(6) scope and nature of services - As a mem-
ber in public practice, you should observe the
, principles of the AICPA Code in determining
the scope and nature of services to be per-
formed
8. What is the Professional Creed? As a professional CPA, I willingly accept my
responsibility (1) to serve the public interest,
(2) to maintain and broaden public confi-
dence by performing all my responsibilities
with integrity, (3) to maintain my objectivity
and be free of conflicts of interest, and to
discharge all of my responsibilities with due
care.
9. What are the AICPA rules on receiving Gifts cannot impair your ability to be objec-
gifts from a client? What factors should be tive. The following three factors should be
considered? considered:
1. Self-interest - threat that you could benefit
financially
2. Familiarity - due to long or close relation-
ship
3. Undue Influence - threat that you will sub-
ordinate your judgment to an individual as-
sociated with the client due to that individ-
ual's reputation or expertise, aggressive per-
sonality, or excessive influence
10. What is the definition of professional Each CPA should evaluate whether his/her
competence according to AICPA? education, experience, and judgment are ad-
equate for the responsibilities assumed
11. What's an example of having competence
as a CPA?
UPDATED ACTUAL Questions and CORRECT Answers
1. What are the 10 steps in the ethical deci- Step One: Recognize the Ethical Issue
sion making model? Step Two: Gather the Critical Facts
Step Three: Identify the Stakeholders
Step Four: Consider Alternatives
Step Five: Consider the Effect on Stakehold-
ers
Step Six: Consider Your Comfort Level
Step Seven: Consider Rules, Regulations, and
Laws
Step Eight: Make a Decision
Step Nine: Document your Efforts
Step Ten: Evaluate the Outcome
2. What does recognizing a potential ethical
issue look like?
3. What does considering your comfort level Ask yourself "If I had to discuss your decision
look like? in public, would you be concerned about it
reflects on your ethics?"
4. What is the difference between the AIC- The AICPA is the national professional organi-
PA, SEC, PCAOB, and your state board of zation for CPAs. AICPA provides resources and
public accountancy? information to members and coordinate ac-
tivities with state CPA societies. SEC empow-
ered by congress to regulate financial report-
ing of PUBLICLY-held companies. SEC estab-
lishes and enforces rules on accounting and
auditing (including auditor independence).
PCAOB (created by SOX and overseen by SEC)
establish rules with respect to auditing and
other attestation engagements, quality con-
, trol of audits, and independence of public
auditors. State Board issues CPA license and
are frontline for oversight on ethical behav-
ior. Can create state ethics codes (can create
separate ones, or incorporate AICPA rules).
Must follow state board rules for state they
are licensed in.
5. What is the new structure of the AICPA Preface - overview, principles, and defini-
Ethics codification? tions)
Part 1 - rules related to those in public prac-
tice, conceptual framework on independence
and other rules on ethical conflicts
Part 2 - Rules and interpretations applicable
to members in business (private practice)
Part 3 - Rules and interpretations applicable
to all other members (retired, between jobs,
etc.)
6. What are the 4 sections of the AICPA Pretty sure it's just this again (looked it up and
Ethics codification? this is what I got everywhere I looked)
1. Preface - overview, principles, and defini-
tions
2. Part 1 - Rules related to those in public
practice, conceptual framework on indepen-
dence and other rules, guidance on ethical
conflict resolution
3. Part 2 - Rules and interpretations applic-
able to members in business (private prac-
, tice)
4. Part 3 - Rules and interpretations applic-
able to all other members (retired, between
jobs, etc.)
7. What are the 6 pillars/principles of the (1) responsibilities - In carrying out your pro-
code and what do each mean? fessional responsibilities, you should exer-
cise sensitive professional and moral judg-
ment
(2) serve the public interest - You should act
in a way that will serve the public interest,
honor the public trust, and demonstrate your
commitment to professionalism
(3) integrity - To maintain and broaden public
confidence, you should perform all profes-
sional responsibilities with the highest sense
of integrity (being honest even when no one
is looking or "above reproach").
(4) objectivity and independence - You
should maintain objectivity and be free from
conflicts of interest in discharging your pro-
fessional duties.
(5) due care and - You should observe the
profession's technical and ethical standards,
strive continually to improve competence and
the quality of services, and discharge pro-
fessional responsibility to the best of your
ability.
(6) scope and nature of services - As a mem-
ber in public practice, you should observe the
, principles of the AICPA Code in determining
the scope and nature of services to be per-
formed
8. What is the Professional Creed? As a professional CPA, I willingly accept my
responsibility (1) to serve the public interest,
(2) to maintain and broaden public confi-
dence by performing all my responsibilities
with integrity, (3) to maintain my objectivity
and be free of conflicts of interest, and to
discharge all of my responsibilities with due
care.
9. What are the AICPA rules on receiving Gifts cannot impair your ability to be objec-
gifts from a client? What factors should be tive. The following three factors should be
considered? considered:
1. Self-interest - threat that you could benefit
financially
2. Familiarity - due to long or close relation-
ship
3. Undue Influence - threat that you will sub-
ordinate your judgment to an individual as-
sociated with the client due to that individ-
ual's reputation or expertise, aggressive per-
sonality, or excessive influence
10. What is the definition of professional Each CPA should evaluate whether his/her
competence according to AICPA? education, experience, and judgment are ad-
equate for the responsibilities assumed
11. What's an example of having competence
as a CPA?
