Professional Ethics in Accounting Flashcards
7 cards from real AAT L2 practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Professional Ethics in Accounting flashcards as text
An accountant realises they have made a material error in a client's VAT return that has already been submitted. What should they do?
Answer: Inform the client promptly and advise on correcting the return with HMRC
Professional integrity requires the accountant to inform the client about the error and advise on the appropriate corrective action with HMRC.
Which of the following scenarios represents a 'familiarity threat' to ethical behaviour?
Answer: Being too closely associated with a long-standing client and overlooking errors out of loyalty
A familiarity threat arises when an accountant becomes too sympathetic to a client's interests due to a close or long-standing relationship.
What is the purpose of 'customer due diligence' (CDD) in the context of anti-money laundering regulations?
Answer: To verify a client's identity and assess the risk that they may be involved in money laundering
CDD involves verifying the identity of clients and understanding the nature of their business to assess money laundering risk.
An AAT student is pressured by their employer to process a transaction they believe is improper. This is an example of which type of threat?
Answer: Intimidation threat
An intimidation threat occurs when a member feels coerced or pressured by a client, employer or other party to act improperly.
When is it acceptable for an AAT member to disclose confidential client information without the client's consent?
Answer: When required to do so by law, such as in response to a court order
Confidential information can be disclosed without consent when there is a legal or regulatory duty to do so, such as a court order or statutory requirement.
What is the AAT's recommended approach when a member faces an ethical dilemma that cannot be resolved internally?
Answer: Seek guidance from the AAT's ethics advice service or another professional body
When internal resolution fails, AAT members are encouraged to seek independent guidance from the AAT ethics helpline or relevant professional bodies.
Which statement correctly describes the difference between 'ethical rules' and 'ethical principles' in the AAT Code?
Answer: Principles provide a framework for judgement; rules prescribe specific required actions
The AAT Code is principles-based, providing a framework for professional judgement, whereas a rules-based approach would prescribe every specific required action.