CPA Ethics & Professional Responsibilities Flashcards
6 cards from real CPA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CPA Ethics & Professional Responsibilities flashcards as text
Which AICPA Code of Professional Conduct principle requires CPAs to act in a manner that will serve the public interest?
Answer: Public Interest
The Public Interest principle requires CPAs to act in a way that serves clients, employers, the public, and the profession.
Under the AICPA independence rules, which of the following would impair a CPA's independence when performing an audit?
Answer: Owning a direct financial interest in the client
Any direct financial interest in an audit client impairs independence regardless of materiality.
A CPA discovers a material error in a previously issued tax return. What is the CPA's primary obligation?
Answer: Inform the client and recommend corrective action
The CPA must promptly inform the client of the error and recommend filing an amended return, but cannot act without client consent.
Which of the following is NOT a threat to CPA independence identified by the AICPA?
Answer: Competence threat
The AICPA identifies self-interest, self-review, advocacy, familiarity, and intimidation as the five main threats to independence; competence is not one of them.
The AICPA's concept of 'due professional care' requires a CPA to perform services with the:
Answer: Competence and diligence of a reasonable CPA
Due professional care requires the competence and diligence that a reasonable and prudent CPA would exercise in similar circumstances.
A CPA in public practice may NOT receive a contingent fee for:
Answer: Preparation of an original tax return
The AICPA prohibits contingent fees for preparing an original tax return because it impairs objectivity.