AICPA Code of Professional Conduct UPDATED ACTUAL Questions and
CORRECT Answers
1. The indepen- If a member cannot control the actions or relationships of someone else (client)
dence of a mem-
ber in public
practice or a
covered member
may be impaired
with respect to a
client
2. The "Breach of Contains guidance for a member if one identifies a breach of an independence
an Independence interpretation of the code.
Interpretation" of
the "Indepen- The member should evaluate the significance of the breach and evaluate the effect
dence Rule" on the member's ability to comply with the rules of the code.
The member should take immediate action to satisfactorily address the conse-
quences of the breach and determine whether to report the breach.
In making the evaluation and determining what actions should be taken, the
member should exercise professional judgment and take into account whether a
reasonable and informed third party, thinking about the significance and the action
to be taken, and all the specific facts and circumstances available to the member
at that time, would be likely to conclude that the member is able to comply with
the rules of the code.
Just b/c member believes the breach is addressed doesn't mean that it's over or
prevents an investigation or enforcement action; the member should be prepared
to justify such determination.
3. Attest engage- Those individuals, employees and contractors regardless of their functional clas-
ment team sification, participating in the attest engagement, including those who perform
concurring and engagement quality reviews.
, Excludes specialists and individuals who perform only routine clerical functions,
such as word processing and photocopying.
4. Close Relative A parent, sibling, or nondependent child
5. All Covered Mem- 1. An individual on the attest engagement team
bers 2. An individual in a position to influence the attest engagement
3. A partner/partner equivalent/manager who provides more than 10 hours of
nonattest service to the attest client within any fiscal year
4. A partner/partner equivalent in the oflce in which the lead attest engagement
partner or partner equivalent primarily practices in connection with the attest
engagement
6. Direct financial A financial interest that is
interest
a. owned directly by an individual or entity
b. under the control of an individual or entity
c. beneficially owned through an investment vehicle, estate, trust, or other inter-
mediary when the beneficiary controls the intermediary or has the authority to
supervise or participate in the intermediary's investment decisions.
7. Financial interest An ownership interest in an equity or a debt security issued by an entity, including
rights and obligations to acquire such an interest and derivatives directly related
to such interest
8. Financial state- An entity whose financial statements are audited, reviewed, or compiled when the
ment attest client member's compilation report does not disclose a lack of independence.
9. Immediate family A spouse, spousal equivalent, or dependent (regardless of whether the dependent
is
related)
10. Independence. 1. Independence of mind is the state of mind that permits a member to perform an
Consists of two attest service without being affected by influences that compromise professional
, elements, judgment, thereby allowing an individual to act with integrity and exercise objec-
defined as tivity and professional skepticism.
follows: 2. Independence in appearance is the avoidance of circumstances that would
cause a reasonable and informed third party who has knowledge of all relevant
information, including the safeguards
applied, to reasonably conclude that the integrity, objectivity, or professional skep-
ticism of a firm
or member of the attest engagement team is compromised.
11. Indirect financial A financial interest beneficially owned through an investment vehicle, an estate,
interest a trust, or an other intermediary when the beneficiary neither controls the in-
termediary nor has the authority to supervise or participate in the intermediary's
investment decisions.
12. Individual in a One who
position to influ- 1. evaluates the performance or recommends the compensation of the attest
ence the attest engagement partner;
engagement 2. directly supervises or manages the attest engagement partner
3. consults with the attest engagement team regarding technical or industry-relat-
ed issues specific to the attest engagement; or
4. participates in or oversees, at all successively senior levels, quality control activi-
ties, including internal monitoring, with respect to the specific attest engagement.
13. Key position. A 1. primary responsibility for significant accounting functions that support material
position in which components of the financial statements;
an individual has 2. primary responsibility for the preparation of the financial statements; or
3. the ability to exercise influence over the contents of the financial statements,
including when the individual is a member of the board of directors or similar
governing body
14. Office A reasonably distinct subgroup within a firm, whether constituted by formal or-
ganization or informal practice, in which personnel who make up the subgroup
CORRECT Answers
1. The indepen- If a member cannot control the actions or relationships of someone else (client)
dence of a mem-
ber in public
practice or a
covered member
may be impaired
with respect to a
client
2. The "Breach of Contains guidance for a member if one identifies a breach of an independence
an Independence interpretation of the code.
Interpretation" of
the "Indepen- The member should evaluate the significance of the breach and evaluate the effect
dence Rule" on the member's ability to comply with the rules of the code.
The member should take immediate action to satisfactorily address the conse-
quences of the breach and determine whether to report the breach.
In making the evaluation and determining what actions should be taken, the
member should exercise professional judgment and take into account whether a
reasonable and informed third party, thinking about the significance and the action
to be taken, and all the specific facts and circumstances available to the member
at that time, would be likely to conclude that the member is able to comply with
the rules of the code.
Just b/c member believes the breach is addressed doesn't mean that it's over or
prevents an investigation or enforcement action; the member should be prepared
to justify such determination.
3. Attest engage- Those individuals, employees and contractors regardless of their functional clas-
ment team sification, participating in the attest engagement, including those who perform
concurring and engagement quality reviews.
, Excludes specialists and individuals who perform only routine clerical functions,
such as word processing and photocopying.
4. Close Relative A parent, sibling, or nondependent child
5. All Covered Mem- 1. An individual on the attest engagement team
bers 2. An individual in a position to influence the attest engagement
3. A partner/partner equivalent/manager who provides more than 10 hours of
nonattest service to the attest client within any fiscal year
4. A partner/partner equivalent in the oflce in which the lead attest engagement
partner or partner equivalent primarily practices in connection with the attest
engagement
6. Direct financial A financial interest that is
interest
a. owned directly by an individual or entity
b. under the control of an individual or entity
c. beneficially owned through an investment vehicle, estate, trust, or other inter-
mediary when the beneficiary controls the intermediary or has the authority to
supervise or participate in the intermediary's investment decisions.
7. Financial interest An ownership interest in an equity or a debt security issued by an entity, including
rights and obligations to acquire such an interest and derivatives directly related
to such interest
8. Financial state- An entity whose financial statements are audited, reviewed, or compiled when the
ment attest client member's compilation report does not disclose a lack of independence.
9. Immediate family A spouse, spousal equivalent, or dependent (regardless of whether the dependent
is
related)
10. Independence. 1. Independence of mind is the state of mind that permits a member to perform an
Consists of two attest service without being affected by influences that compromise professional
, elements, judgment, thereby allowing an individual to act with integrity and exercise objec-
defined as tivity and professional skepticism.
follows: 2. Independence in appearance is the avoidance of circumstances that would
cause a reasonable and informed third party who has knowledge of all relevant
information, including the safeguards
applied, to reasonably conclude that the integrity, objectivity, or professional skep-
ticism of a firm
or member of the attest engagement team is compromised.
11. Indirect financial A financial interest beneficially owned through an investment vehicle, an estate,
interest a trust, or an other intermediary when the beneficiary neither controls the in-
termediary nor has the authority to supervise or participate in the intermediary's
investment decisions.
12. Individual in a One who
position to influ- 1. evaluates the performance or recommends the compensation of the attest
ence the attest engagement partner;
engagement 2. directly supervises or manages the attest engagement partner
3. consults with the attest engagement team regarding technical or industry-relat-
ed issues specific to the attest engagement; or
4. participates in or oversees, at all successively senior levels, quality control activi-
ties, including internal monitoring, with respect to the specific attest engagement.
13. Key position. A 1. primary responsibility for significant accounting functions that support material
position in which components of the financial statements;
an individual has 2. primary responsibility for the preparation of the financial statements; or
3. the ability to exercise influence over the contents of the financial statements,
including when the individual is a member of the board of directors or similar
governing body
14. Office A reasonably distinct subgroup within a firm, whether constituted by formal or-
ganization or informal practice, in which personnel who make up the subgroup
