About Ethics In Accounting (1c)

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  • 1/10 Questions

    Generally, ethical behavior applies at all times, in any function in business. 

    • True
    • False
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About This Quiz

This quiz, titled 'About Ethics in Accounting (1C)', assesses knowledge on ethical standards in accounting, focusing on integrity, objectivity, and disclosure requirements. It is designed to evaluate understanding of ethical practices essential for accountants, highlighting the impact on business reputation and legal compliance.

About Ethics In Accounting (1c) - Quiz

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  • 2. 

    Based on your reading of the ABOUT Ethics in Accounting Reading Material (given article 7) respond to the following:The "separation of functions within the department" is an example of an INTERNAL CONTROL.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    The "separation of functions within the department" refers to the practice of dividing responsibilities and tasks among different individuals within the accounting department. This internal control measure helps to prevent fraud, errors, and conflicts of interest by ensuring that no single individual has complete control over a financial transaction from start to finish. By separating functions, it becomes more difficult for one person to manipulate or misuse financial information without detection. Therefore, the statement is true.

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  • 3. 

    Based on your reading of the ABOUT Ethics in Accounting Reading Material (given article 4) respond to the following:Select the choice that reflects the term(s) and/or phrases that complete the following statement (in sequence):New ________ standards require companies to institute ________ ________ systems and assess those systems annually. Companies also are required to provide full disclosure of _______ _______ _____ ____ items in periodic reports. In section ___, the act clearly states the penalties for unethical accountants, which includes fines and imprisonment.

    • Disclosure, internal control, off-balance sheet, 802, disclosure

    • Disclosure, internal control, off-balance sheet , 802

    • Disclosure, off-balance sheet, 802, internal control

    Correct Answer
    A. Disclosure, internal control, off-balance sheet , 802
    Explanation
    New disclosure standards require companies to institute internal control systems and assess those systems annually. Companies also are required to provide full disclosure of off-balance sheet items in periodic reports. In section 802, the act clearly states the penalties for unethical accountants, which includes fines and imprisonment.

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  • 4. 

    Based on your reading of the ABOUT Ethics in Accounting Reading Material (given article 5) respond to the following:The IMA notes the following ethical standards in managerial accounting, EXCEPT: 

    • Credibility

    • Competence

    • Confidentiality

    • Integrity

    • Materiality

    Correct Answer
    A. Materiality
    Explanation
    The IMA notes the following ethical standards in managerial accounting: competence, confidentiality, integrity and credibility

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  • 5. 

    Based on your reading of the ABOUT Ethics in Accounting Reading Material (given article 6) respond to the following:Select the choice that reflects the term(s) and/or phrases that complete the following statement (in sequence):Ethics refer to the level of honesty you carry into your job. In principle, ethics are _______ and can vary between individuals with opposing views of right and wrong, which is why codes of ethics are created by certain groups to govern themselves. In accounting, there is only one acceptable position -- complete _____ and _____. Never are accountants more tempted to forgo that ultimate ethical duty as when _____ _______ are involved.

    • Subjective, trust, honesty, stock accounts

    • Objective, trust, honesty, cash accounts

    • Subjective, trust, honesty, cash accounts

    Correct Answer
    A. Subjective, trust, honesty, cash accounts
    Explanation
    Ethics refer to the level of honesty you carry into your job. In principle, ethics are subjective and can vary between individuals with opposing views of right and wrong, which is why codes of ethics are created by certain groups to govern themselves. In accounting, there is only one acceptable position -- complete trust and honesty. Never are accountants more tempted to forgo that ultimate ethical duty as when cash accounts are involved.

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  • 6. 

    Based on your reading of the ABOUT Ethics in Accounting Reading Material (given article 2) respond to the following:Select the word and/or phrase that is NOT part of the statement:Objectivity and independence are important ethical values in the accounting profession. Accountants must remain free ______________________________________________ when conducting accounting services.

    • From conflicts of interest

    • Disclosing client information

    • Questionable business relationships

    • All of the above

    Correct Answer
    A. All of the above
    Explanation
    Objectivity and independence are important ethical values in the accounting profession. Accountants must remain free from conflicts of interest and other questionable business relationships when conducting accounting services.

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  • 7. 

    Based on your reading of the ABOUT Ethics in Accounting Reading Material (CA-4, given article 1) respond to the following:Ethics and Integrity Standards are based on the following, EXCEPT: 

    • Honesty

    • Accuracy

    • Impartiality

    • Objectivity

    • There are no clear roles and responsibilities in the group; people just tend to run.

    Correct Answer
    A. There are no clear roles and responsibilities in the group; people just tend to run.
    Explanation
    In accounting, ethics and integrity standards are based on a broad commitment to honesty, impartiality and objectivity. Ethical standards also require that accountants present information in the clearest and most accurate way possible, with the expectation that the information constitutes an independent report of a business' financial situation.

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  • 8. 

    Based on your reading of the ABOUT Ethics in Accounting Reading Material (given article 2) respond to the following:Select the word and/or phrase that completes the following statement:Integrity is an important fundamental element of the accounting profession. Integrity requires accountants to be _______________________________ with a client's financial information.

    • Honest, accurate and forthright

    • Accurate, candid and forthright

    • Honest, candid and forthright

    • Honest, candid and accurate

    • Each member of the relay team has a very defined role and set of responsibilities in order to win the race.

    Correct Answer
    A. Honest, candid and forthright
    Explanation
    Integrity is an important fundamental element of the accounting profession. Integrity requires accountants to be honest, candid and forthright with a client’s financial information.

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  • 9. 

    Based on your reading of the ABOUT Ethics in Accounting Reading Material (given article 3) respond to the following:Select the "EFFECTS" discussed in the article:

    • Business reputation

    • Personal consequences

    • Criminal activities

    • Usefulness of financial statements

    Correct Answer(s)
    A. Business reputation
    A. Personal consequences
    A. Criminal activities
    A. Usefulness of financial statements
    Explanation
    The article discusses several effects related to ethics in accounting. One of the effects mentioned is on business reputation, which refers to how ethical behavior in accounting can impact the perception and trustworthiness of a company. Another effect discussed is personal consequences, which refers to the potential negative outcomes or penalties that individuals may face if they engage in unethical accounting practices. The article also mentions criminal activities as an effect, highlighting the potential legal repercussions that can arise from unethical behavior in accounting. Lastly, the article mentions the usefulness of financial statements as an effect, emphasizing how ethical accounting practices contribute to accurate and reliable financial reporting.

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  • 10. 

    Based on your reading of the ABOUT Ethics in Accounting Reading Material (given article 7) respond to the following:Select the entities discussed in the article that "created the 'Generally Accepted Accounting Principles' that define the ethical practices and principles of accounting that businesses use."

    • SEC

    • GAAP

    • FASB

    • AICPA

    Correct Answer(s)
    A. SEC
    A. FASB
    Explanation
    The Securities and Exchange Commission (SEC) and the Financial Accounting Standards Board (FASB) are the entities discussed in the article that created the Generally Accepted Accounting Principles (GAAP). The SEC is a government agency responsible for regulating and overseeing the financial securities industry, while the FASB is a private organization that establishes accounting standards for public companies in the United States. These two entities work together to define the ethical practices and principles of accounting that businesses use. The American Institute of Certified Public Accountants (AICPA) is not mentioned in the article as being involved in creating GAAP.

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  • Current Version
  • Mar 22, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Dec 24, 2014
    Quiz Created by
    Navamaestro

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