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 five fundamental principles of the AAT Code of Professional Ethics include all of the following EXCEPT:
Answer: Independence
The five fundamental principles are: integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour. Independence is not itself a fundamental principle, though it supports objectivity.
Integrity in professional ethics requires an accountant to be:
Answer: Straightforward and honest in all professional and business relationships
Integrity requires professional accountants to be straightforward, honest, and truthful; it encompasses not making false statements, not concealing information, and not allowing others to be misled.
Which of the following is an example of a self-interest threat?
Answer: An accountant holds shares in a client company
Holding shares in a client creates a self-interest threat — the accountant has a personal financial stake in the client's performance, which could compromise their objectivity.
Under the AAT Code, if an accountant is asked to produce information they know to be misleading, they should:
Answer: Refuse to produce the misleading information
The fundamental principle of integrity requires an accountant to refuse to produce, provide, or be associated with information they know to be false, misleading, or designed to deceive.
The objectivity principle requires an accountant to:
Answer: Not allow bias, conflict of interest, or undue influence to override professional judgements
Objectivity requires professional accountants to exercise unbiased professional judgements without allowing conflicts of interest, personal bias, or pressure from others to compromise their assessment.
What is 'money laundering' in the context of professional ethics for accountants?
Answer: The process of concealing the origins of criminally obtained money to make it appear legitimate
Money laundering involves making the proceeds of criminal activity (e.g., drug trafficking, fraud, tax evasion) appear legitimate by passing the funds through financial transactions and systems to hide their true origin.