Question 1

What are the six fundamental principles in the AICPA Code of Professional Conduct?

Accepted Answer

Responsibilities, Public Interest, Integrity, Objectivity and Independence, Due Care, and Scope and Nature of Services.

Question 2

Under the AICPA Code, what is the definition of 'integrity' as it applies to a CPA?

Accepted Answer

Integrity requires a CPA to be honest and candid within the constraints of client confidentiality, and to not subordinate the public interest to personal gain or the gain of others.

Question 3

What is the 'conceptual framework' approach used in the AICPA Code of Professional Conduct?

Accepted Answer

It is a risk-based approach requiring CPAs to identify threats to compliance with the rules, evaluate their significance, and apply safeguards to eliminate or reduce threats to an acceptable level.

Question 4

What are the two components of independence that CPAs must maintain when performing attest engagements?

Accepted Answer

Independence in fact (actual independence — an unbiased mental attitude) and independence in appearance (avoiding circumstances that would cause a reasonable person to doubt independence).

Question 5

Under AICPA rules, which family relationship would impair a CPA's independence when auditing a client?

Accepted Answer

A spouse, spousal equivalent, or dependent who has a direct financial interest in the client, or holds a key position (e.g., director, officer, or employee in a position to influence financial statements) at the client.

CPA Exam: Ethics & Compliance

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