INSTRUCTOR TEST BANK – CHAPTER 1
MULTIPLE CHOICE
1. The AICPA’s Code of Professional Conduct establishes:
a. The rules of conduct for structuring and conducting audits and other
attestation engagements
b. The rules of conduct for conducting audits, but no other forms of attestation
c. The rules for resolving technical judgments in achieving a fair presentation
of financial statements
d. The normative rules of ethical behavior that guide professional accountants
SOLUTION: D
1. The AICPA’s Code of Professional Conduct expresses professional standards:
a. That are mandatory minimum rules of behavior that all members of the
AICPA must comply with
b. That, when violated, constitute crimes under most, if not all, state
accountancy licensing statutes
c. That are aspirational goals, but yet are rarely achieved by most professional
accountants
d. That establish worldwide standards that all professionals accountants must,
at minimum, comply with
SOLUTION: A
2. The AICPA’s Code of Professional Conduct expressly applies to:
a. All CPAs who are compelled by state law to join the AICPA
b. All CPAs who have valid CPA licenses in good standing
, c. All CPAs who have valid CPA licenses, even if their licenses temporarily are
suspended due to misconduct
d. All CPAs who voluntarily join the AICPA
SOLUTION: D
3. Membership in the AICPA:
a. Automatically makes a CPA a member of IFAC as well
b. Automatically subjects a CPA to the ethical rules established by the IFAC
Code as well
c. Does not entitle a CPA to join IFAC
d. Entitles a CPA to join IFAC upon payment of additional dues
SOLUTION: C
4. The membership rules of IFAC:
a. Prevent CPAs from joining it if they are not actively in practice
b. Encourage CPAs from around the world to join it
c. Deny membership to CPAs who are unwilling to abide by its rules of ethical
conduct
d. Deny membership to all individual CPAs
SOLUTION: D
5. The SEC had:
a. A primary role in the development of the AICPA Code of Professional
Conduct
, b. A secondary role in the development of the AICPA Code of Professional
Conduct
c. No role in the development of the AICPA Code of Professional Conduct, but it
retains the authority to override this code of conduct concerning the behavior
of both internal and external auditors performing services relating to the
financial activities of regional and local financial institutions
d. No role in the development of the AICPA Code of Professional Conduct
SOLUTION: D
6. An Enrolled Agent is subject to the AICPA’s Code of Professional Conduct:
a. Automatically
b. Only if she also holds a state CPA license as well
c. Only if she is granted membership in the AICPA
d. Only if she performs auditing services as an employee or partner in a CPA
firm that is an AICPA member
SOLUTION: C
7. If a single woman is working as a professional accountant outside the United
States, joining IFAC is:
a. Impossible
b. Mandatory
c. Permitted only if an existing IFAC member recommends her
d. Optional but highly recommended as a reputational tool for attracting and
retaining clients
SOLUTION: A
, 8. IFAC is often referred to as:
a. The “Global Watchdog”
b. The “Global Accounting Police”
c. An “Organization of Organizations”
d. The “AICPA’s Little Brother”
SOLUTION: C
9. The rules of the AICPA are required to be:
a. Identical to the rules of the IFAC
b. Developed by the international professional accounting community through
IFAC and then applied through the IFAC to professional accountants
practicing in the United States
c. More rigorous than IFAC’s rules due to the mandates imposed by American
stock exchange trading rules
d. Never more lenient that the rules of the IFAC
SOLUTION: D
10. Normative ethics focuses on:
a. How people normally behave
b. How people have been observed to behave, based on one or more empirical
studies
c. How people should behave
d. The conduct of accountants that is most prevalent in their profession
MULTIPLE CHOICE
1. The AICPA’s Code of Professional Conduct establishes:
a. The rules of conduct for structuring and conducting audits and other
attestation engagements
b. The rules of conduct for conducting audits, but no other forms of attestation
c. The rules for resolving technical judgments in achieving a fair presentation
of financial statements
d. The normative rules of ethical behavior that guide professional accountants
SOLUTION: D
1. The AICPA’s Code of Professional Conduct expresses professional standards:
a. That are mandatory minimum rules of behavior that all members of the
AICPA must comply with
b. That, when violated, constitute crimes under most, if not all, state
accountancy licensing statutes
c. That are aspirational goals, but yet are rarely achieved by most professional
accountants
d. That establish worldwide standards that all professionals accountants must,
at minimum, comply with
SOLUTION: A
2. The AICPA’s Code of Professional Conduct expressly applies to:
a. All CPAs who are compelled by state law to join the AICPA
b. All CPAs who have valid CPA licenses in good standing
, c. All CPAs who have valid CPA licenses, even if their licenses temporarily are
suspended due to misconduct
d. All CPAs who voluntarily join the AICPA
SOLUTION: D
3. Membership in the AICPA:
a. Automatically makes a CPA a member of IFAC as well
b. Automatically subjects a CPA to the ethical rules established by the IFAC
Code as well
c. Does not entitle a CPA to join IFAC
d. Entitles a CPA to join IFAC upon payment of additional dues
SOLUTION: C
4. The membership rules of IFAC:
a. Prevent CPAs from joining it if they are not actively in practice
b. Encourage CPAs from around the world to join it
c. Deny membership to CPAs who are unwilling to abide by its rules of ethical
conduct
d. Deny membership to all individual CPAs
SOLUTION: D
5. The SEC had:
a. A primary role in the development of the AICPA Code of Professional
Conduct
, b. A secondary role in the development of the AICPA Code of Professional
Conduct
c. No role in the development of the AICPA Code of Professional Conduct, but it
retains the authority to override this code of conduct concerning the behavior
of both internal and external auditors performing services relating to the
financial activities of regional and local financial institutions
d. No role in the development of the AICPA Code of Professional Conduct
SOLUTION: D
6. An Enrolled Agent is subject to the AICPA’s Code of Professional Conduct:
a. Automatically
b. Only if she also holds a state CPA license as well
c. Only if she is granted membership in the AICPA
d. Only if she performs auditing services as an employee or partner in a CPA
firm that is an AICPA member
SOLUTION: C
7. If a single woman is working as a professional accountant outside the United
States, joining IFAC is:
a. Impossible
b. Mandatory
c. Permitted only if an existing IFAC member recommends her
d. Optional but highly recommended as a reputational tool for attracting and
retaining clients
SOLUTION: A
, 8. IFAC is often referred to as:
a. The “Global Watchdog”
b. The “Global Accounting Police”
c. An “Organization of Organizations”
d. The “AICPA’s Little Brother”
SOLUTION: C
9. The rules of the AICPA are required to be:
a. Identical to the rules of the IFAC
b. Developed by the international professional accounting community through
IFAC and then applied through the IFAC to professional accountants
practicing in the United States
c. More rigorous than IFAC’s rules due to the mandates imposed by American
stock exchange trading rules
d. Never more lenient that the rules of the IFAC
SOLUTION: D
10. Normative ethics focuses on:
a. How people normally behave
b. How people have been observed to behave, based on one or more empirical
studies
c. How people should behave
d. The conduct of accountants that is most prevalent in their profession
