Accounting Ethics Final Exam Review With
100% Correct And Verified Answers
IMA (Institute of Management Accountants) Principles -
Correct Answer-1. Honesty
2. Fairness
3. Objectivity
4. Responsibility
IMA (Institute of Management Accountants) Standards -
Correct Answer-1. Competence
2. Confidentiality
3. Integrity
4. Credibility
Competence - Correct Answer-1) Professional duties in
compliance with laws and standards
2) Professional expertise by continually developing skills and
knowledge
3) Provide information that is accurate, clear, concise, and
timely
4) Recognize professional limitations
Confidentiality - Correct Answer-1) Inform all parties about
an appropriate use of confidential information
2) Refrain from using info for unethical reaons
Integrity - Correct Answer-1) Mitigate conflicts of interest
2) No prejudice that could influence judgment
3) Don't do anything that discredits the profession
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,Credibility - Correct Answer-1) Communicate fairly and
objectively
2) Disclose all material information
3) Disclose all delays and deficiencies
Josephson's Six Pillars of Character - Correct Answer-1.
Trustworthiness
2. Respect
3. Responsibility
4. Fairness
5. Caring
6. Citizenship
Turstworthiness - Correct Answer-1) Honest; truth and full
disclosure
2) Integrity; morale values
3) Reliable; commitments
4) Loyalty; protection of confidential info
Respect - Correct Answer-1) Treat others with dignity and
fairness
2) Civility, courtesy, decency, tolerance, and acceptance
Responsibility - Correct Answer-1) Due professional care or
due diligence
2) Accountability
,Caring - Correct Answer-1) Empathetic
2) Consider impacts on other people
Citizenship - Correct Answer-1) Take actions
that benefit society
2) Be a good citizen; obey the laws, volunteer,
etc.
4 Key Constituent Groups of CPAs - Correct
Answer-1) Client organization (hires and pays
for accounting & auditing services)
2) CPA Firm
3) Accounting Profession & Regulatory
Bodies (SEC, PCAOB)
4) General Public (existing & future investors,
lenders who rely on the CPA's work)
Ethics and audit - Correct Answer-1) Requires professional
skepticism and integrity
2) Must not let irrelevant factors influence the professional
judgment
Business Stakeholders - Correct Answer-1. Owners/Shareholders
(existing & potential) (stock value)
2. Creditors/Suppliers (credit or investment); Vendors and
suppliers grant credit based on financial data provided directly or
from credit rating agencies who use published or available
financial data.
3. Employees (jobs, pensions); investment in 401K plan2
4. Customers (products, private info)
5. Society at large (environment, products)
6. Government Agencies (IRS, SEC, EPA, Funding)
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, Primary Ethical Issues in business - Correct Answer-1. Honesty;
lies in general; resume and immaterial supplies
2. Fairness
3. Conflicts of Interest; disclosure as a good prevention
4. Discrimination; treat everyone with equal respect
5. Information Technology; data privacy
6. Fraud
Types of Business Fraud - Correct Answer-1. Corruption (Bribes,
kickbacks)
- Can be acceptable in different cultures
2. Misappropriation or Theft of assets
3. Fraudulent financial reporting
How is fraud detected? - Correct Answer-1) Tips - About 40 - 50%
2) Since 2010, management review 2nd - 15%
3) Internal (14%) & External Auditors (4%)
4) Accidental - 7%
Institute of Internal Auditors - Code of Ethics - Correct Answer-1)
Integrity
2) Objectivity
3) Confidentiality
4) Competency
Corporate governance (definition) - Correct Answer-According to
AICPA definition
1) Those charged with governance
2) Has responsibility for overseeing the strategic direction
and the obligations (related to accountability)
of the entity
3) Oversees financial reporting process
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