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CPA ethics course Questions and Correct
Answers/ Latest Update / Already Graded
To address an ethical matter and make good judgments, you must
first be able to recognize issues when they arise.
Ans: This means being familiar with the profession's body of
rules and regulations from the American Institute of Certified
Public Accountants, your local state accountancy boa rd, which
issues your license to practice, and other sources of regulation.
This also means staying attuned to potential ethical "warning
signs."
ethical decision making model
Ans: 1. recognize the ethical issue
2. gather the critical facts
3. identify the stakeholders
4. consider your alternatives
5. consider the effect on stakeholders
6. consider your comfort level
All rights reserved © 2025/ 2026 |
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7 consider rules, regulations and laws
8. make a decision
9. document your effort
10. evaluate the outcome
Which step in the decision-making model is characterized by asking
the question, "Are these options consistent with applicable
professional ethics rules, regulations, and laws?"
Ans: consider rules, regulations and laws.
Step 7 asks this question. You may determine that the greatest
benefit and least amount of harm would likely result if you take
a particular course of action, but if that course of action is
inconsistent with the profession's rules of conduct, you may not
ignore those rules
Which step in the decision-making model is characterized by asking
the question, "If you had to discuss your decision in public, would you
be concerned about how it reflects on your ethics?"
All rights reserved © 2025/ 2026 |
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Ans: consider your comfort level
Step 6 asks you to consider your comfort level. Before you
make a decision about the correct action when facing an ethical
issue, you should ask yourself some questions. Click the forward
arrow to continue.
GAO
Ans: The GAO issues ethics and independence rules that apply
to engagements performed under generally accepted
government auditing standards (GAGAS). These governmental
standards are commonly referred to as the "Yellow Book." We
will discuss these rules later in this course.
Internal Revenue Service (IRS)
Ans: The IRS is a government agency under the U.S.
Department of the Treasury. The Internal Revenue Code (IRC)
authorizes the Secretary of the Treasury to set rules and
regulations necessary to enforce the U.S. tax laws. Treasury
Department Circular 230 governs federal tax practice before the
IRS by CPAs, enrolled agents, attorneys, and actuaries, and the
IRS Office of Professional Responsibility (OPR) enforces these
regulations. Preparer penalty and confidentiality provisions
All rights reserved © 2025/ 2026 |
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appear in the IRC. We will discuss the ethics requirements for
CPAs in tax practice later in this course.
U.S. Department of Labor (DOL)
Ans: Auditors of employee benefit plans that file reports with
the DOL should be aware of the DOL interpretive bulletin on
independence. These rules will be addressed later in this
course.
American Institute of Certified Public Accountants
Ans: The American Institute of Certified Public Accountants is
the national professional organization for all certified public
accountants. Its mission is to provide members with the
resources and information that enable them to offer valuable
services in the highest professional manner to benefit the
public, employers, and clients.
Securities and Exchange Commission (SEC)
Ans: The SEC is a federal agency that establishes and enforces
accounting and auditing policy, including auditor
independence. Its mission is to improve the professional
performance of public company auditors to ensure that
All rights reserved © 2025/ 2026 |
CPA ethics course Questions and Correct
Answers/ Latest Update / Already Graded
To address an ethical matter and make good judgments, you must
first be able to recognize issues when they arise.
Ans: This means being familiar with the profession's body of
rules and regulations from the American Institute of Certified
Public Accountants, your local state accountancy boa rd, which
issues your license to practice, and other sources of regulation.
This also means staying attuned to potential ethical "warning
signs."
ethical decision making model
Ans: 1. recognize the ethical issue
2. gather the critical facts
3. identify the stakeholders
4. consider your alternatives
5. consider the effect on stakeholders
6. consider your comfort level
All rights reserved © 2025/ 2026 |
, Page |2
7 consider rules, regulations and laws
8. make a decision
9. document your effort
10. evaluate the outcome
Which step in the decision-making model is characterized by asking
the question, "Are these options consistent with applicable
professional ethics rules, regulations, and laws?"
Ans: consider rules, regulations and laws.
Step 7 asks this question. You may determine that the greatest
benefit and least amount of harm would likely result if you take
a particular course of action, but if that course of action is
inconsistent with the profession's rules of conduct, you may not
ignore those rules
Which step in the decision-making model is characterized by asking
the question, "If you had to discuss your decision in public, would you
be concerned about how it reflects on your ethics?"
All rights reserved © 2025/ 2026 |
, Page |3
Ans: consider your comfort level
Step 6 asks you to consider your comfort level. Before you
make a decision about the correct action when facing an ethical
issue, you should ask yourself some questions. Click the forward
arrow to continue.
GAO
Ans: The GAO issues ethics and independence rules that apply
to engagements performed under generally accepted
government auditing standards (GAGAS). These governmental
standards are commonly referred to as the "Yellow Book." We
will discuss these rules later in this course.
Internal Revenue Service (IRS)
Ans: The IRS is a government agency under the U.S.
Department of the Treasury. The Internal Revenue Code (IRC)
authorizes the Secretary of the Treasury to set rules and
regulations necessary to enforce the U.S. tax laws. Treasury
Department Circular 230 governs federal tax practice before the
IRS by CPAs, enrolled agents, attorneys, and actuaries, and the
IRS Office of Professional Responsibility (OPR) enforces these
regulations. Preparer penalty and confidentiality provisions
All rights reserved © 2025/ 2026 |
, Page |4
appear in the IRC. We will discuss the ethics requirements for
CPAs in tax practice later in this course.
U.S. Department of Labor (DOL)
Ans: Auditors of employee benefit plans that file reports with
the DOL should be aware of the DOL interpretive bulletin on
independence. These rules will be addressed later in this
course.
American Institute of Certified Public Accountants
Ans: The American Institute of Certified Public Accountants is
the national professional organization for all certified public
accountants. Its mission is to provide members with the
resources and information that enable them to offer valuable
services in the highest professional manner to benefit the
public, employers, and clients.
Securities and Exchange Commission (SEC)
Ans: The SEC is a federal agency that establishes and enforces
accounting and auditing policy, including auditor
independence. Its mission is to improve the professional
performance of public company auditors to ensure that
All rights reserved © 2025/ 2026 |
