Which organization issues the Code of Ethics for Professional Accountants?
a) Financial Accounting Standards Board (FASB)
b) International Ethics Standards Board for Accountants (IESBA)
c) Public Company Accounting Oversight Board (PCAOB)
d) Securities and Exchange Commission (SEC)
The fundamental principle of integrity in accounting means:
a) Acting in the best interest of clients only
b) Being honest and straightforward in all professional relationships
c) Maximizing financial gains regardless of legality
d) Hiding financial irregularities
Which ethical principle ensures accountants maintain professional knowledge and skills?
a) Objectivity
b) Professional competence and due care
c) Confidentiality
d) Integrity
The principle of objectivity in accounting means:
a) Accountants must remain free from bias and conflicts of interest
b) Accountants can prioritize personal financial gain
c) Accountants must always agree with management decisions
d) Accountants should manipulate financial records when necessary
Which fundamental principle requires accountants to protect confidential information?
a) Integrity
b) Objectivity
c) Professional behavior
d) Confidentiality
An accountant should refuse to accept an engagement if:
a) The fee is lower than expected
b) The client asks for services outside the accountant’s expertise
c) The client wants fraudulent financial reporting
d) The accountant is too busy
A conflict of interest occurs when:
a) An accountant takes on too many clients
b) An accountant has a financial or personal interest that impairs objectivity
c) An accountant is unaware of professional standards
d) A client refuses to pay on time
Which of the following is an ethical violation in accounting?
a) Preparing financial statements in accordance with GAAP
b) Disclosing confidential client information without authorization
c) Conducting an independent audit
d) Following legal accounting procedures
A CPA discovers fraudulent activity at a client’s firm. The CPA should:
a) Ignore it to maintain client relations
b) Report it according to legal and professional guidelines
c) Cover it up to protect the client’s reputation
d) Continue working without action
The ethical principle of professional behavior requires accountants to:
a) Always agree with management
b) Comply with laws and avoid actions that harm the profession
c) Focus only on financial gains
d) Ignore unethical activities in the workplace
Which of the following is considered unethical conduct for an accountant?
a) Reporting accurate financial data
b) Accepting bribes to alter financial reports
c) Following established accounting standards
d) Refusing to participate in fraudulent activities
When can an accountant disclose confidential client information?
a) Whenever they choose
b) When legally required or with client consent
c) To friends and family for discussion
d) If the accountant changes firms
An accountant preparing false tax returns is guilty of:
a) Ethical responsibility
b) Professional conduct
c) Fraud and professional misconduct
d) Standard accounting practices
The primary role of an independent auditor is to:
a) Assist in tax evasion
b) Provide an unbiased opinion on financial statements
c) Approve all company financial transactions
d) Help companies manipulate profits
Which of the following is an unethical accounting practice?
a) Overstating revenue to increase stock prices
b) Accurately reporting financial data
c) Following auditing standards
d) Maintaining independent judgment
What should an accountant do if they are asked to violate accounting standards?
a) Follow the client’s request
b) Ignore ethical concerns
c) Refuse and report the request if necessary
d) Make small changes to accommodate the client
The Sarbanes-Oxley Act (SOX) was passed to:
a) Encourage unethical accounting practices
b) Increase transparency and prevent fraud in financial reporting
c) Help companies hide financial losses
d) Allow manipulation of financial statements
Professional skepticism in auditing means:
a) Trusting financial statements without verification
b) Questioning and critically assessing financial information
c) Accepting management explanations without review
d) Ignoring potential fraud indicators
Accountants must refuse gifts or favors from clients if:
a) They are too expensive
b) They could influence professional judgment
c) They come during tax season
d) The client insists
Which is an ethical responsibility of an accountant?
a) Maximizing profits at any cost
b) Misleading investors
c) Providing fair and accurate financial information
d) Hiding financial transactions
