Ethics for Accountants Flashcards
6 cards from real AAT L3 practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Ethics for Accountants flashcards as text
The purpose of the AAT disciplinary process is to:
Answer: Maintain the standards of the profession and protect the public from unethical practitioners
AAT's disciplinary process upholds professional standards by investigating complaints and taking action (warnings, fines, suspension, or termination of membership) against members who breach the Code or behave unethically.
Which of the following is an example of 'tax avoidance'?
Answer: Using a legitimate ISA to shelter savings interest from income tax
Tax avoidance involves using legal means (such as ISAs, pension contributions, or legitimate reliefs) to reduce a tax liability. It is legal, though some aggressive schemes may be challenged. Tax evasion (illegal) includes failing to declare income.
An accountant who deliberately inflates a client's expense claims to reduce their tax bill is committing:
Answer: Tax evasion (a criminal offence)
Deliberately inflating expense claims to reduce tax is tax evasion — a criminal offence under the Fraud Act 2006 and Taxes Management Act 1970. The accountant could face professional sanctions and prosecution.
Continuing Professional Development (CPD) is important for accountants because:
Answer: It ensures knowledge remains current, supporting the principle of professional competence
CPD maintains and develops the knowledge, skills, and competencies required to perform professional duties effectively; it is a core obligation under the professional competence principle of the AAT Code.
An accountant who agrees with a client's aggressive accounting treatment just to avoid conflict is exhibiting:
Answer: Lack of objectivity — allowing personal comfort to override professional judgement
Allowing the desire to avoid conflict or maintain a relationship to override professional judgement is a failure of objectivity; the accountant should challenge inappropriate treatments regardless of client preference.
Which of the following actions helps an accountant maintain confidentiality in a digital environment?
Answer: Using strong passwords and encryption for files containing client data
Maintaining confidentiality in a digital environment requires appropriate technical safeguards including encryption, strong access controls, and secure transmission methods to prevent unauthorised access to client data.