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Question 1
What are the six fundamental principles in the AICPA Code of Professional Conduct?
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?
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?
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?
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?
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.