Aicpa - Professional Code Of Conduct - Rule 102 - Integrity And Objectivity

5 Questions | By Ddf - Ethics Cla | Updated: Mar 21, 2022 | Attempts: 130

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Aicpa - Professional Code Of Conduct - Rule 102 - Integrity And Objectivity - Quiz

“In the performance of any professional service, a member shall maintain objectivity and integrity, shall be free of conflicts of interest, and shall not knowingly misrepresent facts or subordinate his or her judgment to others. ”

Questions and Answers

1.

A general partnership owned by two partners engages you to provide services to the partnership and each of the partners. One partner has a 70% share and the other 30%. Two years into the engagement, the majority partner solicits you to provide confidential advice on how to creatively finance some large debts he has accumulated. Is there a conflict of interest for you in this scenario?
- A.
  
  Yes
- B.
  
  No
Correct Answer
A. Yes
2.

You have been doing tax work for a limited partnership as well as for the general partners of the partnership. After three years, you notice the general partners are paying themselves fees larger than those that were specified in the limited partnership agreement. If the general partners do not want to disclose this fact to the limited partners, what should you do?
- A.
  
  The CPA has a fiduciary duty to disclose excess management fee information to the limited partners.
- B.
  
  The CPA should refrain from disclosing the excess management fee information to the limited partners.
Correct Answer
A. The CPA has a fiduciary duty to disclose excess management fee information to the limited partners.
3.

Your client owns "Designed by Bella", a highly successful women’s clothing boutique. The owner is approached by two outside investors with the idea of opening two more boutiques. The owner incorporates and goes public, bringing in the outside investors and asking you to sit on the corporation’s board of directors. You accept, buy stock in the corporation and—applying avoidance of conflict-of-interest guidelines—disclose your lack of independence to appropriate parties. Another client asks you to recommend a good investment.Your conflict-of-interest was appropriately reported. Could you recommend an investment in "Designed by Bella" under AICPA's Professional Code of Conduct?
- A.
  
  Yes
- B.
  
  No
Correct Answer
B. No
4.

Your longtime clients Robert and Cathy are entering into divorce proceedings, and Robert, whom you’ve never met (because Cathy handles all the financial affairs of the couple, including taxes) has requested that you provide tax services to him as well as to Cathy during and after the divorce process. Are you prohibited by the Code from representing both spouses?
- A.
  
  Yes
- B.
  
  No
Correct Answer
B. No
5.

Identify all the scenarios that pose a threat to compliance with AICPA Rules of Conduct?1. As part of an attest engagement, a CPA uses consulting work previously done by his firm.2. A CPA charges his employer with violating certain labor laws.3. An employer pressures a CPA to be associated with misleading information.4. A CPA is directed to complete a task within an unrealistic time frame.5. Revenue received from a single client is significant to the firm.
- A.
  
  2, 3 and 5
- B.
  
  1, 2, and 3
- C.
  
  2, 3, and 4
- D.
  
  All of the above.
Correct Answer
D. All of the above.

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Current Version
Mar 21, 2022

Quiz Edited by
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Oct 17, 2009

Quiz Created by
Ddf - Ethics Cla