Indiana CPA
Professional Ethics
Exam: Elite Universal
Test Bank
PART 0: THE NAVIGATOR
● PART I: THE PRIMER (Core Axioms & Strategic Focus)
● PART II: THE ELITE TEST BANK
○ Tier 1 (Questions 1–28) - Foundational Syntax & Application: Testing Indiana
statutory definitions, CPA examination timelines, HEA 1143 integration, and
baseline CPE frameworks.
○ Tier 2 (Questions 29–58) - Complex Application & Simulation: Analyzing
multi-variable scenarios involving firm ownership compliance, AICPA Code of
Conduct omissions, client record retention, and the civil penalty matrix.
○ Tier 3 (Questions 59–88) - Grandmaster Synthesis: High-stakes regulatory
conflicts demanding the synthesis of accountant-client privilege, criminal conviction
reporting, peer review failures, and complex fee structures.
PART I: THE PRIMER
Mastering this highly specialized test bank forges your intuitive grasp of Indiana's specific
regulatory architecture, elevating you from a technically proficient accountant to an elite, legally
bulletproof practitioner. This exact synthesis of the Indiana Administrative Code (872 IAC) and
the Indiana Code (IC 25-2.1) translates directly to flawless regulatory compliance, shielding your
practice from catastrophic disciplinary sanctions.
The "Critical Axioms" Cheat Sheet
● The 36-Month Rolling Window: Indiana candidate exam scores remain valid for
precisely 36 months, with the clock starting exactly on the date NASBA releases the
passing score, not the testing date.
● The 2027 HEA 1143 Pathway: Effective January 1, 2027, an alternate licensure pathway
exists: a Bachelor’s degree plus 2 years of verified relevant experience, bypassing the
legacy 150-hour mandate.
● The 90-Day Conviction Mandate: Under IC 25-1-1.1-1, you must report any
misdemeanor or felony conviction (except standard, non-DUI traffic offenses) in writing to
the Board within exactly 90 days of the entry of the order or judgment.
● The 872 IAC AICPA Exceptions: Indiana adopts the AICPA Code of Professional
, Conduct, except Sections 0-100 through 0-200-050 are explicitly deleted. Furthermore,
any AICPA use of the word "should" is strictly interpreted as a mandate requiring
compliance or documented justification.
● The Ownership Imperative: Firm permits require a "simple majority" of financial and
voting rights to be held by active CPAs. Nonlicensees may own minority shares only if
they are active, individual participants in the firm.
Core Compliance Matrix
Compliance Category Regulatory Threshold Statutory / Administrative Origin
CPE Triennial Total 120 hours (min 20 hours/year) 872 IAC 1-3-16
CPE A&A Minimum 10% (12 hours) 872 IAC 1-3-16
CPE Ethics Minimum 4 hours 872 IAC 1-3-16
CPE Self-Study Limit Maximum 50% (60 hours) 872 IAC 1-3-16
Civil Penalty Baseline $1,000 (if no statutory max is 872 IAC 1-2-1.1
set)
PART II: THE ELITE TEST BANK
Q1: An Indiana CPA candidate currently possesses 120 semester hours of education, which
includes the required accounting concentration. They wish to sit for the Uniform CPA
Examination. Based on Indiana Board of Accountancy regulations, which action is the MOST
ACCURATE? A) The candidate must complete an additional 30 hours to reach 150 hours
before sitting for any exam section. B) The candidate is barred from testing until the HEA 1143
pathway activates in 2027. C) The candidate may sit for the exam, as the 120-hour threshold
applies to testing eligibility, not final licensure. D) The candidate may sit only if they hold an
active Master's degree.
● The Answer: C (The candidate may sit for the exam, as the 120-hour threshold applies to
testing eligibility, not final licensure.)
● Distractor Analysis:
○ A is incorrect: The 150-hour requirement applies strictly to final licensure, not the
examination.
○ B is incorrect: HEA 1143 alters licensure experience requirements, not the baseline
120-hour testing rule.
○ D is incorrect: A Master's degree is one of several valid educational methods, not a
strict mandate for sitting.
The Mentor's Analysis: Indiana strategically decoupled the examination phase from the
licensure phase to accelerate workforce entry. By testing at 120 hours, candidates leverage
fresh academic knowledge while finishing their final licensure requirements.
Professional/Academic Intuition: Always separate testing eligibility (120 hours) from
licensure eligibility (150 hours or the 2027 HEA 1143 pathway).
Q2: A candidate passes the Financial Accounting and Reporting (FAR) section of the Uniform
CPA Exam. Under current Indiana rules, when does the countdown for the expiration of this
score begin? A) On the exact date the candidate physically sat for the FAR examination. B) 18
months from the date of the score release. C) Precisely on the date NASBA releases the
passing score to the candidate or the board. D) At the end of the calendar year in which the
exam was passed.
● The Answer: C (Precisely on the date NASBA releases the passing score to the candidate
, or the board.)
● Distractor Analysis:
○ A is incorrect: The physical testing date does not trigger the expiration clock.
○ B is incorrect: The 18-month window is an outdated legacy rule replaced by the
36-month window.
○ D is incorrect: The clock is a rolling window, not tied to calendar year-ends.
The Mentor's Analysis: Precision in administrative deadlines prevents catastrophic exam loss.
The state shifted the start date to the score release to ensure candidates are not penalized for
grading delays. Professional/Academic Intuition: The 36-month rolling window is triggered
exclusively by the NASBA score release date.
Q3: Effective January 1, 2027, under House Enrolled Act (HEA) 1143, Indiana introduces an
alternate pathway to CPA licensure. Which precise combination of requirements defines this
new pathway? A) Associate degree + 5 years of industry experience + CPA Exam. B)
Bachelor’s degree + 2 years of relevant experience + CPA Exam. C) Master’s degree + 0 years
of experience + CPA Exam. D) 150 semester hours + 6 months of experience + CPA Exam.
● The Answer: B (Bachelor’s degree + 2 years of relevant experience + CPA Exam.)
● Distractor Analysis:
○ A is incorrect: Associate degrees do not satisfy the minimum baccalaureate
threshold.
○ C is incorrect: Statutory work experience cannot be completely waived.
○ D is incorrect: This blends the legacy 150-hour rule with an inaccurate experience
timeline.
The Mentor's Analysis: The state enacted HEA 1143 to combat talent pipeline shortages while
maintaining rigorous professional standards. This pathway substitutes 30 academic credit hours
for practical, verified field experience. Professional/Academic Intuition: The 2027 HEA 1143
pathway trades academic volume for practical application, requiring a Bachelor's degree
and exactly two years of verified work experience.
Q4: A candidate seeks licensure under the legacy 150-hour rule. They possess a Bachelor's
degree in English Literature and 30 additional graduate credit hours in history. They have only
completed 6 credit hours in basic accounting. Under 872 IAC 1-1-6.1, are they eligible for
licensure? A) Yes, because they have achieved the required total volume of 150 hours. B) No,
they lack the mandatory 24 semester hours in core accounting subjects. C) Yes, provided they
can pass the Uniform CPA Exam. D) No, degrees outside of business administration are strictly
prohibited.
● The Answer: B (No, they lack the mandatory 24 semester hours in core accounting
subjects.)
● Distractor Analysis:
○ A is incorrect: Total credit volume does not satisfy specific categorical prerequisites.
○ C is incorrect: Exam passage does not cure underlying educational deficits.
○ D is incorrect: Non-business degrees are acceptable provided the candidate
completes the required core accounting and business administration hours.
The Mentor's Analysis: Total academic volume without technical specificity is useless for public
protection. The Board demands a specific concentration of knowledge to ensure baseline
competence. Professional/Academic Intuition: The 150-hour volume rule is entirely void
without the specific inclusion of 24 semester hours of core accounting coursework.
Q5: An Indiana CPA is audited for their Continuing Professional Education (CPE) compliance.
The auditor discovers the CPA completed exactly 120 hours of total CPE over the triennial
period, but only completed 15 hours in year one, 45 hours in year two, and 60 hours in year
, three. What is the MOST ACCURATE assessment of this cycle? A) The CPA is compliant
because the 120-hour total was achieved within the three years. B) The CPA is non-compliant
because they failed to meet the 20-hour minimum required for each individual calendar year. C)
The CPA is compliant because the hours escalated progressively. D) The CPA is non-compliant
because they exceeded 50 hours in year three.
● The Answer: B (The CPA is non-compliant because they failed to meet the 20-hour
minimum required for each individual calendar year.)
● Distractor Analysis:
○ A is incorrect: Reaching the triennial total does not cure an annual minimum deficit.
○ C is incorrect: Escalation is not a recognized compliance metric.
○ D is incorrect: There is no maximum cap for hours taken in a single year, only a
triennial minimum.
The Mentor's Analysis: Professional development must be continuous, not crammed. The Board
enforces annual minimums to prevent skill stagnation. Professional/Academic Intuition:
Compliance requires both macro-totals (120 hours) and strict adherence to the 20-hour
annual minimum floor.
Q6: A CPA specializing entirely in corporate taxation completes their 120-hour CPE
requirement. They completed 4 hours of Ethics and 116 hours of advanced taxation courses.
Based on Indiana Board rules (872 IAC 1-3-16), which statement is correct? A) They are
compliant because taxation is their primary practice area. B) They are non-compliant because
they failed to complete the mandatory 10% (12 hours) in Accounting and Auditing (A&A). C)
They are compliant if they operate outside of public accounting (e.g., industry). D) They are
non-compliant because Ethics requires 8 hours per cycle.
● The Answer: B (They are non-compliant because they failed to complete the mandatory
10% (12 hours) in Accounting and Auditing (A&A).)
● Distractor Analysis:
○ A is incorrect: Practice specialization does not grant exemptions to categorical CPE
mandates.
○ C is incorrect: Industry CPAs must still complete A&A hours to maintain the active
credential.
○ D is incorrect: The Ethics requirement is 4 hours, not 8.
The Mentor's Analysis: The CPA license is universal in its foundational requirements.
Regardless of your daily job, you hold a credential that signals auditing competence to the
public. Professional/Academic Intuition: The 10% A&A minimum is a hard deck requirement
for all active licensees, inextricably linked to the license itself, not the licensee's current
job description.
Q7: To maximize efficiency, a CPA decides to complete their entire 120-hour CPE cycle utilizing
online, self-paced, self-study modules. Under Indiana regulations, how will the Board treat this
submission? A) The Board will accept all 120 hours provided the modules are
NASBA-approved. B) The Board will reject the portfolio because self-study is strictly capped at
50% (60 hours) of the total triennial requirement. C) The Board will accept the hours if the CPA
passes an exam for each module. D) The Board will reject the portfolio because self-study is
banned in Indiana.
● The Answer: B (The Board will reject the portfolio because self-study is strictly capped at
50% (60 hours) of the total triennial requirement.)
● Distractor Analysis:
○ A is incorrect: NASBA approval verifies course quality, but does not override state
delivery method caps.
Professional Ethics
Exam: Elite Universal
Test Bank
PART 0: THE NAVIGATOR
● PART I: THE PRIMER (Core Axioms & Strategic Focus)
● PART II: THE ELITE TEST BANK
○ Tier 1 (Questions 1–28) - Foundational Syntax & Application: Testing Indiana
statutory definitions, CPA examination timelines, HEA 1143 integration, and
baseline CPE frameworks.
○ Tier 2 (Questions 29–58) - Complex Application & Simulation: Analyzing
multi-variable scenarios involving firm ownership compliance, AICPA Code of
Conduct omissions, client record retention, and the civil penalty matrix.
○ Tier 3 (Questions 59–88) - Grandmaster Synthesis: High-stakes regulatory
conflicts demanding the synthesis of accountant-client privilege, criminal conviction
reporting, peer review failures, and complex fee structures.
PART I: THE PRIMER
Mastering this highly specialized test bank forges your intuitive grasp of Indiana's specific
regulatory architecture, elevating you from a technically proficient accountant to an elite, legally
bulletproof practitioner. This exact synthesis of the Indiana Administrative Code (872 IAC) and
the Indiana Code (IC 25-2.1) translates directly to flawless regulatory compliance, shielding your
practice from catastrophic disciplinary sanctions.
The "Critical Axioms" Cheat Sheet
● The 36-Month Rolling Window: Indiana candidate exam scores remain valid for
precisely 36 months, with the clock starting exactly on the date NASBA releases the
passing score, not the testing date.
● The 2027 HEA 1143 Pathway: Effective January 1, 2027, an alternate licensure pathway
exists: a Bachelor’s degree plus 2 years of verified relevant experience, bypassing the
legacy 150-hour mandate.
● The 90-Day Conviction Mandate: Under IC 25-1-1.1-1, you must report any
misdemeanor or felony conviction (except standard, non-DUI traffic offenses) in writing to
the Board within exactly 90 days of the entry of the order or judgment.
● The 872 IAC AICPA Exceptions: Indiana adopts the AICPA Code of Professional
, Conduct, except Sections 0-100 through 0-200-050 are explicitly deleted. Furthermore,
any AICPA use of the word "should" is strictly interpreted as a mandate requiring
compliance or documented justification.
● The Ownership Imperative: Firm permits require a "simple majority" of financial and
voting rights to be held by active CPAs. Nonlicensees may own minority shares only if
they are active, individual participants in the firm.
Core Compliance Matrix
Compliance Category Regulatory Threshold Statutory / Administrative Origin
CPE Triennial Total 120 hours (min 20 hours/year) 872 IAC 1-3-16
CPE A&A Minimum 10% (12 hours) 872 IAC 1-3-16
CPE Ethics Minimum 4 hours 872 IAC 1-3-16
CPE Self-Study Limit Maximum 50% (60 hours) 872 IAC 1-3-16
Civil Penalty Baseline $1,000 (if no statutory max is 872 IAC 1-2-1.1
set)
PART II: THE ELITE TEST BANK
Q1: An Indiana CPA candidate currently possesses 120 semester hours of education, which
includes the required accounting concentration. They wish to sit for the Uniform CPA
Examination. Based on Indiana Board of Accountancy regulations, which action is the MOST
ACCURATE? A) The candidate must complete an additional 30 hours to reach 150 hours
before sitting for any exam section. B) The candidate is barred from testing until the HEA 1143
pathway activates in 2027. C) The candidate may sit for the exam, as the 120-hour threshold
applies to testing eligibility, not final licensure. D) The candidate may sit only if they hold an
active Master's degree.
● The Answer: C (The candidate may sit for the exam, as the 120-hour threshold applies to
testing eligibility, not final licensure.)
● Distractor Analysis:
○ A is incorrect: The 150-hour requirement applies strictly to final licensure, not the
examination.
○ B is incorrect: HEA 1143 alters licensure experience requirements, not the baseline
120-hour testing rule.
○ D is incorrect: A Master's degree is one of several valid educational methods, not a
strict mandate for sitting.
The Mentor's Analysis: Indiana strategically decoupled the examination phase from the
licensure phase to accelerate workforce entry. By testing at 120 hours, candidates leverage
fresh academic knowledge while finishing their final licensure requirements.
Professional/Academic Intuition: Always separate testing eligibility (120 hours) from
licensure eligibility (150 hours or the 2027 HEA 1143 pathway).
Q2: A candidate passes the Financial Accounting and Reporting (FAR) section of the Uniform
CPA Exam. Under current Indiana rules, when does the countdown for the expiration of this
score begin? A) On the exact date the candidate physically sat for the FAR examination. B) 18
months from the date of the score release. C) Precisely on the date NASBA releases the
passing score to the candidate or the board. D) At the end of the calendar year in which the
exam was passed.
● The Answer: C (Precisely on the date NASBA releases the passing score to the candidate
, or the board.)
● Distractor Analysis:
○ A is incorrect: The physical testing date does not trigger the expiration clock.
○ B is incorrect: The 18-month window is an outdated legacy rule replaced by the
36-month window.
○ D is incorrect: The clock is a rolling window, not tied to calendar year-ends.
The Mentor's Analysis: Precision in administrative deadlines prevents catastrophic exam loss.
The state shifted the start date to the score release to ensure candidates are not penalized for
grading delays. Professional/Academic Intuition: The 36-month rolling window is triggered
exclusively by the NASBA score release date.
Q3: Effective January 1, 2027, under House Enrolled Act (HEA) 1143, Indiana introduces an
alternate pathway to CPA licensure. Which precise combination of requirements defines this
new pathway? A) Associate degree + 5 years of industry experience + CPA Exam. B)
Bachelor’s degree + 2 years of relevant experience + CPA Exam. C) Master’s degree + 0 years
of experience + CPA Exam. D) 150 semester hours + 6 months of experience + CPA Exam.
● The Answer: B (Bachelor’s degree + 2 years of relevant experience + CPA Exam.)
● Distractor Analysis:
○ A is incorrect: Associate degrees do not satisfy the minimum baccalaureate
threshold.
○ C is incorrect: Statutory work experience cannot be completely waived.
○ D is incorrect: This blends the legacy 150-hour rule with an inaccurate experience
timeline.
The Mentor's Analysis: The state enacted HEA 1143 to combat talent pipeline shortages while
maintaining rigorous professional standards. This pathway substitutes 30 academic credit hours
for practical, verified field experience. Professional/Academic Intuition: The 2027 HEA 1143
pathway trades academic volume for practical application, requiring a Bachelor's degree
and exactly two years of verified work experience.
Q4: A candidate seeks licensure under the legacy 150-hour rule. They possess a Bachelor's
degree in English Literature and 30 additional graduate credit hours in history. They have only
completed 6 credit hours in basic accounting. Under 872 IAC 1-1-6.1, are they eligible for
licensure? A) Yes, because they have achieved the required total volume of 150 hours. B) No,
they lack the mandatory 24 semester hours in core accounting subjects. C) Yes, provided they
can pass the Uniform CPA Exam. D) No, degrees outside of business administration are strictly
prohibited.
● The Answer: B (No, they lack the mandatory 24 semester hours in core accounting
subjects.)
● Distractor Analysis:
○ A is incorrect: Total credit volume does not satisfy specific categorical prerequisites.
○ C is incorrect: Exam passage does not cure underlying educational deficits.
○ D is incorrect: Non-business degrees are acceptable provided the candidate
completes the required core accounting and business administration hours.
The Mentor's Analysis: Total academic volume without technical specificity is useless for public
protection. The Board demands a specific concentration of knowledge to ensure baseline
competence. Professional/Academic Intuition: The 150-hour volume rule is entirely void
without the specific inclusion of 24 semester hours of core accounting coursework.
Q5: An Indiana CPA is audited for their Continuing Professional Education (CPE) compliance.
The auditor discovers the CPA completed exactly 120 hours of total CPE over the triennial
period, but only completed 15 hours in year one, 45 hours in year two, and 60 hours in year
, three. What is the MOST ACCURATE assessment of this cycle? A) The CPA is compliant
because the 120-hour total was achieved within the three years. B) The CPA is non-compliant
because they failed to meet the 20-hour minimum required for each individual calendar year. C)
The CPA is compliant because the hours escalated progressively. D) The CPA is non-compliant
because they exceeded 50 hours in year three.
● The Answer: B (The CPA is non-compliant because they failed to meet the 20-hour
minimum required for each individual calendar year.)
● Distractor Analysis:
○ A is incorrect: Reaching the triennial total does not cure an annual minimum deficit.
○ C is incorrect: Escalation is not a recognized compliance metric.
○ D is incorrect: There is no maximum cap for hours taken in a single year, only a
triennial minimum.
The Mentor's Analysis: Professional development must be continuous, not crammed. The Board
enforces annual minimums to prevent skill stagnation. Professional/Academic Intuition:
Compliance requires both macro-totals (120 hours) and strict adherence to the 20-hour
annual minimum floor.
Q6: A CPA specializing entirely in corporate taxation completes their 120-hour CPE
requirement. They completed 4 hours of Ethics and 116 hours of advanced taxation courses.
Based on Indiana Board rules (872 IAC 1-3-16), which statement is correct? A) They are
compliant because taxation is their primary practice area. B) They are non-compliant because
they failed to complete the mandatory 10% (12 hours) in Accounting and Auditing (A&A). C)
They are compliant if they operate outside of public accounting (e.g., industry). D) They are
non-compliant because Ethics requires 8 hours per cycle.
● The Answer: B (They are non-compliant because they failed to complete the mandatory
10% (12 hours) in Accounting and Auditing (A&A).)
● Distractor Analysis:
○ A is incorrect: Practice specialization does not grant exemptions to categorical CPE
mandates.
○ C is incorrect: Industry CPAs must still complete A&A hours to maintain the active
credential.
○ D is incorrect: The Ethics requirement is 4 hours, not 8.
The Mentor's Analysis: The CPA license is universal in its foundational requirements.
Regardless of your daily job, you hold a credential that signals auditing competence to the
public. Professional/Academic Intuition: The 10% A&A minimum is a hard deck requirement
for all active licensees, inextricably linked to the license itself, not the licensee's current
job description.
Q7: To maximize efficiency, a CPA decides to complete their entire 120-hour CPE cycle utilizing
online, self-paced, self-study modules. Under Indiana regulations, how will the Board treat this
submission? A) The Board will accept all 120 hours provided the modules are
NASBA-approved. B) The Board will reject the portfolio because self-study is strictly capped at
50% (60 hours) of the total triennial requirement. C) The Board will accept the hours if the CPA
passes an exam for each module. D) The Board will reject the portfolio because self-study is
banned in Indiana.
● The Answer: B (The Board will reject the portfolio because self-study is strictly capped at
50% (60 hours) of the total triennial requirement.)
● Distractor Analysis:
○ A is incorrect: NASBA approval verifies course quality, but does not override state
delivery method caps.
