CPE Accounting & Tax Institute
Course Study Guide
Final Exam
Course# 10066 CPA Professional Ethics |
CPE & CE Credit: 4 Hours (Ethics-PD)
Prerequisite: None
Price: $189.00
Course Level: Basic
Recommended Study Time: 8 Hours |
Answer
Form | Home Page
Composition, Applicability, and Compliance
1. Principles of the AICPA Code of Professional Conduct provide:
A) Technical Standards
B) Framework for the rules
C) Minimum standards of conduct
D) Guidance for disciplinary action
2. The AICPA Code of Professional Conduct provides guidance and rules
to members:
A) in public practice
B) in industry
C) in government
D) all of the above
3. AICPA authority to promulgate rules over its members is derived from:
A) Federal statute
B) State statute
C) AICPA bylaws adopted by membership
D) All of the above
4. AICPA Code of Professional Conduct Rules are enforceable only against
members of the AICPA or State Societies that have adopted AICPA rules.
5. In addition to the AICPA, which of the following have ethics rules
applicable to CPAs:
A) State Boards of Accountancy
B) State CPA Society Societies
C) Securities and Exchange Commission
D) A and B only
E) All of the above
6. Interpretations of Rules of Conduct and Ethics Rulings become effective
on the date:
A) published in AICPA Professional Standards (volume 2)
B) of the last day of the month in which it is published in the Journal
of Accountancy
C) of adoption by the AICPA professional ethics division's executive committee
D) None of the above
7. Formal application of Rules of conduct and interpretations to a particular
set of factual circumstances are referred to as:
A) Principles
B) Rules
C) Interpretation of Rules of Conduct
D) Ethics Rulings
8. Disciplinary action by the AICPA is primary to obtaining member compliance
(rather than voluntary) and can include suspension of the member's State CPA certificate
and license.
Section I Principles
9. Principles of the Code of Professional Conduct of the AICPA express
responsibility to:
A) the public
B) clients
C) colleagues
D) All of the above
10. AICPA principles call for commitments:
A) beyond laws
B) beyond regulations
C) at the sacrifice of personal advantage
D) All of the above
11. When resolving conflicts of interest, principles guide placing which
interest first:
A) Clients
B) Employers
C) the Public
D) personal advantage
12. Principles express member responsibility to:
A) Clients
B) Credit Grantors
C) Investors
D) All of the above
13. Which is measured in terms of what is right and just:
A) Due Care
B) Objectivity
C) Independence
D) Integrity
14. Members who are not in public practice must be:
A) Independent
B) Objective
C) Free from appearance of conflict of interest
D) All of the above
15. A distinguishing mark of a profession is:
A) Due Care
B) Acceptance of its responsibility to the public
C) Independence
D) Range of services
16. Which requires a member to plan and adequately supervise engagements:
A) Independence
B) Objectivity
C) Integrity
D) Due Care
17. A member practicing outside the United States may depart from AICPA
rules of conduct in favor of such country's established rules of conduct.
18. A member may permit others to carry out acts which if carried out
by the member would be a violation, so long as member does not provide compensation
19. Member is an employee of Acme performing professional services for
Acme. Under the AICPA Rules of Professional Conduct, Acme is a "client".
20. For independence to be impaired by a financial interest under Interpretation
101-1, which type of interest must be material:
A) Direct
B) Indirect
C) Appearance
D) All of the above
21. Interpretation 101-1 provides that independence is impaired if member
is a trustee of an estate with a direct financial interest unless:
A) Member removes himself as trustee during the engagement period and
at the time of expressing an opinion
B) The direct financial interest in the client is not material
C) Both A and B
D) None of the above
22. Under Interpretation 101-1, the net worth of a member or member's
firm is relevant to determine if independence is impaired for which of the following
financial interests:
A) Direct Investments
B) Member as trustee of a trust
C) Joint investments with a principal stockholder
D) Loans with nonfinancial institution clients
E) All of the above
23. Interpretation 101-1 provides that independence is impaired if member
was a trustee for any pension or profit sharing trust for the enterprise during
which of the following:
A) Period covered by the financial statements
B) Period during the professional engagement
C) Time of expressing an opinion
D) All of the above
24. After January 1, 1992 a member may obtain all of the following types
of loans from a financial institution client where independence is required without
impairing independence except:
A) Automobile loans
B) Insurance policy surrender value loans
C) Loans fully collateralized by cash deposits
D) Credit cards and checking advances under $5,000
E) Home mortgages
25. To determine whether a loan was make under "normal lending procedures,
terms and requirements" member should consider all of the following except:
A) Collateral pledged and member credit standing
B) Repayment terms
C) Interest rate
D) Materiality of loan to financial institution
E) Comparison to loans make to other borrowers
Rule 201 General Standards
26. Under Rule 201, Professional Competence refers to:
A) Exercise of due professional care
B) Obtaining sufficient relevant data
C) Undertake only engagements that can be completed with professional
competence
D) Adequately plan and supervise performance of professional services
27. A General Standard that members are required to follow under Rule
201 is:
A) Integrity and Objectivity
B) Due Professional Care
C) Independence
D) None of the above
Rule 301 Confidential Client Information
28. A CPA who reveals confidential client information while testifying
pursuant to a subpoena or while in court is in violation of the AICPA Code of
Professional Conduct.
A) True
B) False
29. A CPA selling his practice may reveal confidential client information
to the investigating buyer without client consent so long as the review is deemed
"a review of a member's professional practice under AICPA or state CPA society
or Board of Accountancy authorization".
A) True
B) False
Rule 303 Contingent Fees
30. Which of the following are not allowable contingent fee circumstances:
A) Preparing and filing an amended tax return solely to correct an
omission
B) Advocating a private letter ruling
C) Preparing and filing an amended return based upon the subject of
a test case or developing position by the tax authority
D) Requesting a reduction in assessed value by protest
E) All of the above
Rule 503 Commissions and Referral Fees
31. Member pays an attorney friend a referral fee for a new client
and discloses the payment to client. This violates Rule 503.
A) True
B) False
32. Member agrees to sell his tax practice to the Milo Jones firm.
Member agrees to receive 20% of the fees collected by Milo Jones over the next
five years from the tax practice clients, even though no future work will be
performed by member. Even if disclosed to client, this violates Rule 503.
A) True
B) False
33. Under Rule 503, can a member pay a broker commission to obtain
an account, assuming full disclosure to the client.
A) Yes
B) No
Rule 505 Form of Organization and Name
34. Erikson and Martin are owners of the firm Roundhouse, Casey &
Jones CPAs. All other owners have retired. May Erikson and Martin
practice under the name that includes only past owners?
A) Yes
B) No
C) Yes but only for two years since departure of the last name owner
35. Same as 34 except Martin retires leaving Erikson. May Erikson
practice as a sole owner under the name that includes past owners.
A) Yes
B) No
C) Yes but only for two years from departure of Martin
D) Yes but only if Erikson adds his name to the others
Spring 1997 AICPA Council Resolutions Affecting the Code of
Professional Conduct and Bylaws
36. Council Resolution Concerning Rule 505- Form of Organization and
Name requires all of the following characteristics for audit firms except:
A) Majority ownership by CPAs
B) Ultimate responsibility by a CPA owner for all firm services
C) Prohibition of the use of the titles "principal", "officer", "member"
or "shareholder" by a Non-CPA owner
D) Completion of work-related CPE by Non-CPA owners
E) Compliance with the AICPA Code of Professional Conduct by Non-CPA
owners
37. Council Implementing Resolution Under Section 2.3.3 Concerning
Continuing Professional Education For All Members provides:
A) Members in public practice and not in public practice will begin
to have the same continuing education requirement
B) All CPA members shall complete 120 hours CLE for each three year
reporting period
C) Effective date for the new single CLE requirement is from January
1, 2001 forward and for each three year reporting period thereafter.
D) All of the above.
Course Evaluation
38. Indicate your professional designation:
A) CPA
B) Public Accountant
C) Enrolled Agent
D) other (Please write in on answer form)
39. Indicate years experience with subject matter
A) less than 2 years
B) 2 - 5 years
C) 6 - 10 years
D) 11 years and over
40. Did the program meet your learning objectives
A) Yes
B) No
41. Did program linkable text and materials contribute to the achievement
of learning objectives
A) Yes
B) No
42. Was content and subject matter relevant and timely
A) Yes
B) No
43. Was question difficulty
A) about right
B) too easy
C) too difficult
44. Was the prerequisite requirement indicated appropriate
A) Yes
B) No
Answer Form
Copyright © 2003 - 2007 By
CPE Accounting and Tax Institute