CPA Ethics & Professional Responsibility 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 Responsibility flashcards as text
Under the AICPA Code of Professional Conduct, which principle requires a CPA to be straightforward and honest in all professional relationships?
Answer: Integrity
The integrity principle requires CPAs to be honest, candid, and free from deception in all professional and business relationships.
A CPA discovers during an audit that a client has committed an immaterial illegal act. What is the CPA's primary obligation?
Answer: Inform the client's management or those charged with governance
For immaterial illegal acts, the CPA should inform the appropriate level of client management or those charged with governance so corrective action can be taken.
Which threat to CPA independence occurs when a CPA audits their own firm's previous work?
Answer: Self-review threat
A self-review threat arises when a CPA audits or evaluates work that they or their firm previously performed, compromising objectivity.
Under the AICPA rules, which of the following would NOT impair auditor independence?
Answer: Performing bookkeeping services for a non-attest client
Providing bookkeeping services for a non-attest client does not impair independence since independence is only required for attest engagements.
The concept of 'due professional care' in auditing requires auditors to:
Answer: Exercise the skill and diligence of a competent auditor
Due professional care requires auditors to apply the competence and diligence expected of a reasonably skilled professional, without guaranteeing perfection.
Which AICPA standard requires CPAs to maintain confidentiality of client information obtained during a professional engagement?
Answer: Rule 301 — Confidential Client Information
AICPA Rule 301 prohibits CPAs from disclosing confidential client information without client consent, with limited exceptions such as legal subpoenas.