CPA ethics course 2022
To address an ethical matter and make good judgments, you must first be able to recognize issues when
they arise. ANS: This means being familiar with the profession's body of rules and regulations from the
American Institute of Certified Public Accountants, your local state accountancy board, which issues
your license to practice, and other sources of regulation. This also means staying attuned to potential
ethical "warning signs."
ethical decision making model ANS: 1. recognize the ethical issue
2. gather the critical facts
3. identify the stakeholders
4. consider your alternatives
5. consider the effect on stakeholders
6. consider your comfort level
7 consider rules, regulations and laws
8. make a decision
9. document your effort
10. evaluate the outcome
Which step in the decision-making model is characterized by asking the question, "Are these options
consistent with applicable professional ethics rules, regulations, and laws?" ANS: consider rules,
regulations and laws.
Step 7 asks this question. You may determine that the greatest benefit and least amount of harm would
likely result if you take a particular course of action, but if that course of action is inconsistent with the
profession's rules of conduct, you may not ignore those rules
Which step in the decision-making model is characterized by asking the question, "If you had to discuss
your decision in public, would you be concerned about how it reflects on your ethics?" ANS: consider
your comfort level
Step 6 asks you to consider your comfort level. Before you make a decision about the correct action
when facing an ethical issue, you should ask yourself some questions. Click the forward arrow to
continue.
, GAO ANS: The GAO issues ethics and independence rules that apply to engagements performed under
generally accepted government auditing standards (GAGAS). These governmental standards are
commonly referred to as the "Yellow Book." We will discuss these rules later in this course.
Internal Revenue Service (IRS) ANS: The IRS is a government agency under the U.S. Department of the
Treasury. The Internal Revenue Code (IRC) authorizes the Secretary of the Treasury to set rules and
regulations necessary to enforce the U.S. tax laws. Treasury Department Circular 230 governs federal tax
practice before the IRS by CPAs, enrolled agents, attorneys, and actuaries, and the IRS Office of
Professional Responsibility (OPR) enforces these regulations. Preparer penalty and confidentiality
provisions appear in the IRC. We will discuss the ethics requirements for CPAs in tax practice later in this
course.
U.S. Department of Labor (DOL) ANS: Auditors of employee benefit plans that file reports with the DOL
should be aware of the DOL interpretive bulletin on independence. These rules will be addressed later in
this course.
American Institute of Certified Public Accountants ANS: The American Institute of Certified Public
Accountants is the national professional organization for all certified public accountants. Its mission is to
provide members with the resources and information that enable them to offer valuable services in the
highest professional manner to benefit the public, employers, and clients.
Securities and Exchange Commission (SEC) ANS: The SEC is a federal agency that establishes and
enforces accounting and auditing policy, including auditor independence. Its mission is to improve the
professional performance of public company auditors to ensure that financial statements are presented
fairly and have credibility. We will discuss the SEC independence rules later in this course.
Public Company Accounting Oversght Board (PCAOB) ANS: The Sarbanes-Oxley Act of 2002 created and
authorized the PCAOB to establish auditing and related attestation, quality control, ethics, and
independence standards for public company auditors. The SEC oversees the PCAOB's activities. Later, we
will address the independence rules that apply to these auditors, which include the PCAOB rules.
International Federation of Accountants (IFAC) ANS: The IFAC develops standards for auditing,
education, ethics, and public sector financial reporting in the accounting profession globally. It also
promotes good ethical practices by encouraging professional accounting organizations throughout the
world to adopt high ethical standards and helps foster meaningful debate on ethical issues that
accountants face.
CPAs must follow the rules and standards promulgated by which bodies? ANS: State CPA licensing
boards are charged with issuing CPA licenses and overseeing the ethical conduct of CPAs in 55
jurisdictions in the United States. It is critically important for CPAs to know their state board's
requirements. If you are licensed by more than one state board, you should familiarize yourself with
each state's requirements.
The American Institute of Certified Public Accountants Professional Ethics Executive Committee (PEEC)
ANS: promulgates and enforces ethics and independence rules that apply to all of its members. is
responsible for maintaining the American Institute of Certified Public Accountants Code of Professional
Conduct (the code).
To address an ethical matter and make good judgments, you must first be able to recognize issues when
they arise. ANS: This means being familiar with the profession's body of rules and regulations from the
American Institute of Certified Public Accountants, your local state accountancy board, which issues
your license to practice, and other sources of regulation. This also means staying attuned to potential
ethical "warning signs."
ethical decision making model ANS: 1. recognize the ethical issue
2. gather the critical facts
3. identify the stakeholders
4. consider your alternatives
5. consider the effect on stakeholders
6. consider your comfort level
7 consider rules, regulations and laws
8. make a decision
9. document your effort
10. evaluate the outcome
Which step in the decision-making model is characterized by asking the question, "Are these options
consistent with applicable professional ethics rules, regulations, and laws?" ANS: consider rules,
regulations and laws.
Step 7 asks this question. You may determine that the greatest benefit and least amount of harm would
likely result if you take a particular course of action, but if that course of action is inconsistent with the
profession's rules of conduct, you may not ignore those rules
Which step in the decision-making model is characterized by asking the question, "If you had to discuss
your decision in public, would you be concerned about how it reflects on your ethics?" ANS: consider
your comfort level
Step 6 asks you to consider your comfort level. Before you make a decision about the correct action
when facing an ethical issue, you should ask yourself some questions. Click the forward arrow to
continue.
, GAO ANS: The GAO issues ethics and independence rules that apply to engagements performed under
generally accepted government auditing standards (GAGAS). These governmental standards are
commonly referred to as the "Yellow Book." We will discuss these rules later in this course.
Internal Revenue Service (IRS) ANS: The IRS is a government agency under the U.S. Department of the
Treasury. The Internal Revenue Code (IRC) authorizes the Secretary of the Treasury to set rules and
regulations necessary to enforce the U.S. tax laws. Treasury Department Circular 230 governs federal tax
practice before the IRS by CPAs, enrolled agents, attorneys, and actuaries, and the IRS Office of
Professional Responsibility (OPR) enforces these regulations. Preparer penalty and confidentiality
provisions appear in the IRC. We will discuss the ethics requirements for CPAs in tax practice later in this
course.
U.S. Department of Labor (DOL) ANS: Auditors of employee benefit plans that file reports with the DOL
should be aware of the DOL interpretive bulletin on independence. These rules will be addressed later in
this course.
American Institute of Certified Public Accountants ANS: The American Institute of Certified Public
Accountants is the national professional organization for all certified public accountants. Its mission is to
provide members with the resources and information that enable them to offer valuable services in the
highest professional manner to benefit the public, employers, and clients.
Securities and Exchange Commission (SEC) ANS: The SEC is a federal agency that establishes and
enforces accounting and auditing policy, including auditor independence. Its mission is to improve the
professional performance of public company auditors to ensure that financial statements are presented
fairly and have credibility. We will discuss the SEC independence rules later in this course.
Public Company Accounting Oversght Board (PCAOB) ANS: The Sarbanes-Oxley Act of 2002 created and
authorized the PCAOB to establish auditing and related attestation, quality control, ethics, and
independence standards for public company auditors. The SEC oversees the PCAOB's activities. Later, we
will address the independence rules that apply to these auditors, which include the PCAOB rules.
International Federation of Accountants (IFAC) ANS: The IFAC develops standards for auditing,
education, ethics, and public sector financial reporting in the accounting profession globally. It also
promotes good ethical practices by encouraging professional accounting organizations throughout the
world to adopt high ethical standards and helps foster meaningful debate on ethical issues that
accountants face.
CPAs must follow the rules and standards promulgated by which bodies? ANS: State CPA licensing
boards are charged with issuing CPA licenses and overseeing the ethical conduct of CPAs in 55
jurisdictions in the United States. It is critically important for CPAs to know their state board's
requirements. If you are licensed by more than one state board, you should familiarize yourself with
each state's requirements.
The American Institute of Certified Public Accountants Professional Ethics Executive Committee (PEEC)
ANS: promulgates and enforces ethics and independence rules that apply to all of its members. is
responsible for maintaining the American Institute of Certified Public Accountants Code of Professional
Conduct (the code).
