CPA Ethics Exam UPDATED ACTUAL Questions and CORRECT Answers
1. Which category contains the ethical (c) is the conect answer. Code of Professional
standards, a Conduct, Strncture, says that infraction of any of
violation of which makes a member li- the rules makes a member liable to disciplinary
able to disciplinary action.
action? (a) is wrong since members who depart from
(a) Ethics Rulings. the
(b) Interpretations of the Rules. guidance in ethical rulings in similar circum-
(c) Rules. stances
will be asked to justify such departure. They
cannot
however be charged with violating a ruling.
(b) is also wrong since a member cannot be
charged with violating an interpretation. In a
disciplina1y
hearing where the member was charged with
violating a rnle, the member would have the
burden of justifying any departure from inter-
pretations ofthat rule.
2. The Trial Board may, after a hearing, do (b) is the correct answer. Code of Professional
two of the Conduct, Enforcement, says a Trial Board may
three things listed below. Mark the one admonish, suspend or expel a member. The
that the Trial Trial
Board cannot do. Board has no jurisdiction over a member's CPA
(a) Suspend a member. certificate.
(b) Suspend the member's CPA certifi-
cate.
( c) Expel a member.
3. Which of the following requires that any (b) is correct. Code of Professional Conduct,
changes in Structure, says that Principles and Rules must
them be approved by the members of be
, the AICPA? approved by the AI CPA members.
(a) Rules and interpretations of the (a) is wrong and ...
rules. ( c) is wrong since interpretations are prepared
(b) Principles and rules. and issued by the Professional Ethics Executive
(c) Principles, rules and interpretations Committee without obtaining approval by the
of the rules. members.
4. The results of a guilty finding by a Trial (c) is correct. Code of Professional Conduct,
Board will Enforcement says that Trial Board convictions
be: must
(a) published by the AICPA, but the be published with the member's name dis-
member 's name will not be disclosed. closed.
(b) published by the AICPA. and the (a) is then wrong since the name must be dis-
member 's name will be disclosed if the closed.
Trial Board votes to do (b) is also wrong since the Trial Board does not
so. have the option of deciding whether or not the
(c) published by the AICPA with the member's name will be disclosed.
member 's
name given.
5. An interpretation or ethics ruling usually (c) is corect. Code of Professional Conduct,
becomes Structure, says that interpretations and rulings
effective: are
(a) the first day of the month following normally effective the last day of the month they
the are published in the Journal of Accountancy.
month it is published in the Journal of (a) and (b) are therefore wrong.
Accountancy.
(b) two weeks after it is published in The
CPA
Letter.
(c) the last day of the month in which it
, is
published in the Journal of Accountancy.
6. A CPA in public practice (b) is correct. Code of Professional Conduct,
avoid operating Coverage, says that no CPA practicing public
under a code of professional ethics by accounting may avoid operating under a code
choosing not of ethics. The CPA may not join the AI CPA or
to join either the AICPA or any state CPA his or her state CPA society and therefore would
society. not be subject to their codes of ethics. The CPA,
(a) may however, cannot avoid being subject to his or
(b) may not her state board of accountancy's code of ethics
7. The accounting profession 's public in- (d) is the correct answer. As (see Article II) the
cludes CPA's public includes everyone that relies on
(a) Governmental agencies. them. This then would include
(b) Credit grantors. (a) governmental agencies,
(c) Investors. (b) credit grantors and
(d) All of the above (c) investors.
8. Compliance with the AICPA Code of Pro- (c) is the correct answer. Composition, Applica-
fessional bility
Conduct depends primarily on: and Compliance in the Articles says that compli-
(a) Public opinion and reinforcement of ance with the code, as with all standards in an
one's attestation peers. open society, depends primarily on member 's
(b) Disciplinary proceedings when the understanding of the code and voluntary com-
code is pliance with it.
violated. (a) is wrong. This section says that reinforce-
(c) Member's understanding the code ment by one's peers and public opinion is sec-
and voluntary compliance with it. ondary
in obtaining compliance with the code.
(b) is also wrong since this section says disci-
plinary proceedings against those that violate
, the code are the ultimate or final method of
obtaining compliance.
9. The Principles state that a member has (d) is correct. The Preamble to the Articles says
responsibility that members have
to: (a) a responsibility to colleagues,
(a) Colleagues. (b) to clients and
(b) Clients. (c) to the public.
(c) The public.
(d) All of the above.
10. The Principles in the AICPA Code of Pro- (b) is correct. Principles are not enforceable
fessional under
Conduct enforceable their own terms as shown in the section Pur-
under their own terms. pose. Principles are goal-oriented and the rules
(a) are. of
(b) are not. ethics are made and adopted within that frame-
work.
11. A distinguishing mark of a profession (a) is correct. As stated in Article II, the distin-
is: guishing mark of a profession is acceptance of
(a) Acceptance of its responsibility to the its responsibility to the public.
public. (b) The esteem by which it is held by the public
(b) The esteem with which it is held by will come when it shows its responsibility to the
the public. public.
(c) Its ability to influence legislation. (c) Influencing legislation may be important to
the profession but it is not the distinguishing
mark of a profession.
12. The AICPA Code of Professional Conduct (b) is correct. The Code of Professional Con-
provides duct
guidance and rules for: provides rules for all members, As stated in the
(a) Only members in public practice. Articles, section Composition, the membership
1. Which category contains the ethical (c) is the conect answer. Code of Professional
standards, a Conduct, Strncture, says that infraction of any of
violation of which makes a member li- the rules makes a member liable to disciplinary
able to disciplinary action.
action? (a) is wrong since members who depart from
(a) Ethics Rulings. the
(b) Interpretations of the Rules. guidance in ethical rulings in similar circum-
(c) Rules. stances
will be asked to justify such departure. They
cannot
however be charged with violating a ruling.
(b) is also wrong since a member cannot be
charged with violating an interpretation. In a
disciplina1y
hearing where the member was charged with
violating a rnle, the member would have the
burden of justifying any departure from inter-
pretations ofthat rule.
2. The Trial Board may, after a hearing, do (b) is the correct answer. Code of Professional
two of the Conduct, Enforcement, says a Trial Board may
three things listed below. Mark the one admonish, suspend or expel a member. The
that the Trial Trial
Board cannot do. Board has no jurisdiction over a member's CPA
(a) Suspend a member. certificate.
(b) Suspend the member's CPA certifi-
cate.
( c) Expel a member.
3. Which of the following requires that any (b) is correct. Code of Professional Conduct,
changes in Structure, says that Principles and Rules must
them be approved by the members of be
, the AICPA? approved by the AI CPA members.
(a) Rules and interpretations of the (a) is wrong and ...
rules. ( c) is wrong since interpretations are prepared
(b) Principles and rules. and issued by the Professional Ethics Executive
(c) Principles, rules and interpretations Committee without obtaining approval by the
of the rules. members.
4. The results of a guilty finding by a Trial (c) is correct. Code of Professional Conduct,
Board will Enforcement says that Trial Board convictions
be: must
(a) published by the AICPA, but the be published with the member's name dis-
member 's name will not be disclosed. closed.
(b) published by the AICPA. and the (a) is then wrong since the name must be dis-
member 's name will be disclosed if the closed.
Trial Board votes to do (b) is also wrong since the Trial Board does not
so. have the option of deciding whether or not the
(c) published by the AICPA with the member's name will be disclosed.
member 's
name given.
5. An interpretation or ethics ruling usually (c) is corect. Code of Professional Conduct,
becomes Structure, says that interpretations and rulings
effective: are
(a) the first day of the month following normally effective the last day of the month they
the are published in the Journal of Accountancy.
month it is published in the Journal of (a) and (b) are therefore wrong.
Accountancy.
(b) two weeks after it is published in The
CPA
Letter.
(c) the last day of the month in which it
, is
published in the Journal of Accountancy.
6. A CPA in public practice (b) is correct. Code of Professional Conduct,
avoid operating Coverage, says that no CPA practicing public
under a code of professional ethics by accounting may avoid operating under a code
choosing not of ethics. The CPA may not join the AI CPA or
to join either the AICPA or any state CPA his or her state CPA society and therefore would
society. not be subject to their codes of ethics. The CPA,
(a) may however, cannot avoid being subject to his or
(b) may not her state board of accountancy's code of ethics
7. The accounting profession 's public in- (d) is the correct answer. As (see Article II) the
cludes CPA's public includes everyone that relies on
(a) Governmental agencies. them. This then would include
(b) Credit grantors. (a) governmental agencies,
(c) Investors. (b) credit grantors and
(d) All of the above (c) investors.
8. Compliance with the AICPA Code of Pro- (c) is the correct answer. Composition, Applica-
fessional bility
Conduct depends primarily on: and Compliance in the Articles says that compli-
(a) Public opinion and reinforcement of ance with the code, as with all standards in an
one's attestation peers. open society, depends primarily on member 's
(b) Disciplinary proceedings when the understanding of the code and voluntary com-
code is pliance with it.
violated. (a) is wrong. This section says that reinforce-
(c) Member's understanding the code ment by one's peers and public opinion is sec-
and voluntary compliance with it. ondary
in obtaining compliance with the code.
(b) is also wrong since this section says disci-
plinary proceedings against those that violate
, the code are the ultimate or final method of
obtaining compliance.
9. The Principles state that a member has (d) is correct. The Preamble to the Articles says
responsibility that members have
to: (a) a responsibility to colleagues,
(a) Colleagues. (b) to clients and
(b) Clients. (c) to the public.
(c) The public.
(d) All of the above.
10. The Principles in the AICPA Code of Pro- (b) is correct. Principles are not enforceable
fessional under
Conduct enforceable their own terms as shown in the section Pur-
under their own terms. pose. Principles are goal-oriented and the rules
(a) are. of
(b) are not. ethics are made and adopted within that frame-
work.
11. A distinguishing mark of a profession (a) is correct. As stated in Article II, the distin-
is: guishing mark of a profession is acceptance of
(a) Acceptance of its responsibility to the its responsibility to the public.
public. (b) The esteem by which it is held by the public
(b) The esteem with which it is held by will come when it shows its responsibility to the
the public. public.
(c) Its ability to influence legislation. (c) Influencing legislation may be important to
the profession but it is not the distinguishing
mark of a profession.
12. The AICPA Code of Professional Conduct (b) is correct. The Code of Professional Con-
provides duct
guidance and rules for: provides rules for all members, As stated in the
(a) Only members in public practice. Articles, section Composition, the membership
