INTRODUCTION TO TAX PRACTICE AND ETHICS EXAM
/ACTUAL COMPLETE REAL EXAM QUESTIONS AND
CORRECT ANSWERS | ALREADY GRADED A+
VERIFIED ANSWERS | 2025/2026 LATEST
VERSION .
What specific tax-related situations may result in a conflict of
interest for members in public practice under the Integrity and
Objectivity Rule of the AICPA Code of Professional Conduct? -
ANSWER-In a tax practice the CPA may be requested to blindly
follow the guidelines of a government agency or the demands
of an audit client. This rule prohibits such blind obedience. The
code specifically recognizes that conflicts of interest may arise
in tax contexts, including providing tax or personal financial
planning services for several members of a family whom the
member knows to have opposing interests or when referring a
personal financial planning or tax client to an insurance broker
or other service provider who refers clients to the member
under an exclusive arrangement.
Your client has asked your advice regarding a recent property
sale. Are you required to communicate the advice in writing? -
ANSWER-No, under Circular 230 and the SSTSs, advice may be
,either written or oral. SSTS No. 7 provides information on the
form and content of advice to taxpayers for AICPA members
and provides a list of factors that members should consider in
determining whether the advice is written or oral.
The Sarbanes-Oxley Act prohibits CPA firms from providing
certain services to publicly traded corporate audit clients. Is
doing tax compliance work for an audit client one of the
prohibited transactions? If such tax work is allowed, who must
approve it? - ANSWER-No, tax compliance work for an audit
client is allowed. It must be approved by the audit committee of
the issuer.
Who sets ethical rules for attorneys in the various states? -
ANSWER-Neither the ABA Code nor the Model Rules have the
force of law. Each was designed to be adopted by the
appropriate agencies that govern the practice of law in the
various states. In many jurisdictions, the state Supreme Court
is charged with policing the practice of law. In other states, the
legislature assumes this responsibility.
What is an ethical dilemma? - ANSWER-An ethical dilemma
occurs when someone is faced with a situation in which there
are no clearly defined answers such as by regulation or law.
, The text discusses three types of ethical reasoning. Identify
them and give a short description of each. - ANSWER-The
major types of ethical reasoning are as follows:
1. End-based ethical reasoning is where the ethical decision
is the one that produced the most good for the largest number
of people.
2. Rule-based ethical reasoning was based on German
philosopher Immanuel Kant's idea that individual actions
should be such that we would accept similar behavior from
everyone else.
3. Care-based ethical reasoning advises one to make
decisions that would result in the treatment you yourself would
like to receive.
Ethical professional behavior is the interaction of several
standards. Identify these standards and briefly describe each. -
ANSWER-Professional ethical behavior is the result of the
interaction of personal morality, social responsibility, business
ethics, and other general ethical standards. When something is
judged to be morally right or wrong (or good or bad), the
underlying standards on which such judgments are based are
called moral standards. The tax practitioner must be aware of
/ACTUAL COMPLETE REAL EXAM QUESTIONS AND
CORRECT ANSWERS | ALREADY GRADED A+
VERIFIED ANSWERS | 2025/2026 LATEST
VERSION .
What specific tax-related situations may result in a conflict of
interest for members in public practice under the Integrity and
Objectivity Rule of the AICPA Code of Professional Conduct? -
ANSWER-In a tax practice the CPA may be requested to blindly
follow the guidelines of a government agency or the demands
of an audit client. This rule prohibits such blind obedience. The
code specifically recognizes that conflicts of interest may arise
in tax contexts, including providing tax or personal financial
planning services for several members of a family whom the
member knows to have opposing interests or when referring a
personal financial planning or tax client to an insurance broker
or other service provider who refers clients to the member
under an exclusive arrangement.
Your client has asked your advice regarding a recent property
sale. Are you required to communicate the advice in writing? -
ANSWER-No, under Circular 230 and the SSTSs, advice may be
,either written or oral. SSTS No. 7 provides information on the
form and content of advice to taxpayers for AICPA members
and provides a list of factors that members should consider in
determining whether the advice is written or oral.
The Sarbanes-Oxley Act prohibits CPA firms from providing
certain services to publicly traded corporate audit clients. Is
doing tax compliance work for an audit client one of the
prohibited transactions? If such tax work is allowed, who must
approve it? - ANSWER-No, tax compliance work for an audit
client is allowed. It must be approved by the audit committee of
the issuer.
Who sets ethical rules for attorneys in the various states? -
ANSWER-Neither the ABA Code nor the Model Rules have the
force of law. Each was designed to be adopted by the
appropriate agencies that govern the practice of law in the
various states. In many jurisdictions, the state Supreme Court
is charged with policing the practice of law. In other states, the
legislature assumes this responsibility.
What is an ethical dilemma? - ANSWER-An ethical dilemma
occurs when someone is faced with a situation in which there
are no clearly defined answers such as by regulation or law.
, The text discusses three types of ethical reasoning. Identify
them and give a short description of each. - ANSWER-The
major types of ethical reasoning are as follows:
1. End-based ethical reasoning is where the ethical decision
is the one that produced the most good for the largest number
of people.
2. Rule-based ethical reasoning was based on German
philosopher Immanuel Kant's idea that individual actions
should be such that we would accept similar behavior from
everyone else.
3. Care-based ethical reasoning advises one to make
decisions that would result in the treatment you yourself would
like to receive.
Ethical professional behavior is the interaction of several
standards. Identify these standards and briefly describe each. -
ANSWER-Professional ethical behavior is the result of the
interaction of personal morality, social responsibility, business
ethics, and other general ethical standards. When something is
judged to be morally right or wrong (or good or bad), the
underlying standards on which such judgments are based are
called moral standards. The tax practitioner must be aware of
