CPA ETHICS EXAM QUESTIONS WITH
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1. Which category contains the ethical standards, a
violation of which makes a member liable to disciplinary
action?
(a) Ethics Rulings.
(b) Interpretations of the Rules.
(c) Rules.: (c) is the conect answer. Code of
Professional
Conduct, Strncture, says that infraction of any of the rules makes a member liable
to disciplinary action.
(a) is wrong since members who depart from the
guidance in ethical rulings in similar circumstances
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 interpretations ofthat rule.
2. The Trial Board may, after a hearing, do two of the
three things listed below. Mark the one that the Trial
Board cannot do.
(a) Suspend a member.
(b) Suspend the member's CPA certificate.
( c) Expel a member.: (b) is the correct answer. Code of
Professional Conduct, Enforcement, says a Trial Board may
admonish, suspend or expel a member. The Trial Board has no
jurisdiction over a member's CPA certificate.
,3. Which of the following requires that any changes in
them be approved by the members of the AICPA?
(a) Rules and interpretations of the rules.
(b) Principles and rules.
(c) Principles, rules and interpretations of the rules.:
(b) is correct. Code of Professional Conduct,
Structure, says that Principles and Rules must be
approved by the AI CPA members.
(a) is wrong and ...
( c) is wrong since interpretations are prepared and issued by the Professional
Ethics Executive Committee without obtaining approval by the members.
4. The results of a guilty finding by a Trial Board will
be:
(a) published by the AICPA, but the member 's name will not be disclosed.
(b) published by the AICPA. and the member 's name will be disclosed if
the Trial Board votes to do so.
(c) published by the AICPA with the member 's
name given.: (c) is correct. Code of Professional
Conduct, Enforcement says that Trial Board convictions
must be published with the member's name disclosed. (a)
is then wrong since the name must be disclosed.
(b) is also wrong since the Trial Board does not have the option of deciding
whether or not the member's name will be disclosed.
5. An interpretation or ethics ruling usually becomes
effective:
(a) the first day of the month following the month it
is published in the Journal of 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.: (c) is corect. Code of Professional
Conduct,
Structure, says that interpretations and rulings are normally effective the last
day of the month they are published in the Journal of Accountancy.
(a) and (b) are therefore wrong.
6. A CPA in public practice ______________ avoid
operating under a code of professional ethics by choosing
not to join either the AICPA or any state CPA society.
,(a) may
(b) may not: (b) is correct. Code of Professional Conduct, Coverage,
says that no
CPA practicing public accounting may avoid operating under a code of ethics. The
CPA may not join the AI CPA or his or her state CPA society and therefore would
not be subject to their codes of ethics. The CPA, however, cannot avoid being
subject to his or her state board of accountancy's code of ethics 7. The accounting
profession 's public includes (a) Governmental agencies.
(b) Credit grantors.
(c) Investors.
(d) All of the above: (d) is the correct answer. As (see
Article II) the
CPA's public includes everyone that relies on them. This then would include
(a) governmental agencies,
(b) credit grantors and (c)
investors.
8. Compliance with the AICPA Code of Professional
Conduct depends primarily on:
(a) Public opinion and reinforcement of one's attestation peers.
(b) Disciplinary proceedings when the code isviolated.
(c) Member's understanding the code and voluntary compliance with it.: (c)
is the correct answer. Composition, Applicability and Compliance in the Articles
says that compliance with the code, as with all standards in an open society,
depends primarily on member 's understanding of the code and voluntary
compliance with it.
(a) is wrong. This section says that reinforcement by one's peers and public
opinion is secondary in obtaining compliance with the code.
(b) is also wrong since this section says disciplinary proceedings against those
that violate the code are the ultimate or final method of obtaining compliance.
9. The Principles state that a member has responsibility
to:
(a) Colleagues.
(b) Clients.
(c) The public.
(d) All of the above.: (d) is correct. The Preamble to the
Articles says that members have
, (a) a responsibility to colleagues,
(b) to clients and (c) to the
public.
10. The Principles in the AICPA Code of Professional
Conduct ___________________ enforceable under their own terms.
(a) are.
(b) are not.: (b) is correct. Principles are not enforceable under
their own terms as shown in the section Purpose. Principles are goal-oriented and
the rules of ethics are made and adopted within that framework.
11. A distinguishing mark of a profession is:
(a) Acceptance of its responsibility to the public.
(b) The esteem with which it is held by the public.
(c) Its ability to influence legislation.: (a) is correct. As
stated in Article II, the distinguishing mark of a
profession is acceptance of its responsibility to the
public.
(b) The esteem by which it is held by the publicwill come when
it shows its responsibility to the public.
(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 provides
guidance and rules for:
(a) Only members in public practice.
(b) All members.
(c) Only members engaged in rendering
attestationservices.: (b) is correct. The Code of
Professional Conduct
provides rules for all members, As stated in the Articles, section Composition, the
membership
adopted the code to provide guidance and rules for all members-those in
public practice, in industry, in government and in education.
13. Due care requires a member to:
(a) Perform work for clients at the lowest cost.
(b) Perform work for the clients with
competence and diligence.
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