Professional Ethics in Accounting

What is the primary role of accountants in society?

• Managing personal finances

• Developing financial software

• Gatekeeping financial information

• Marketing financial products

What is required for a CPA to maintain their certification?

• Annual membership fees

• Continuing professional education

• Publishing financial research

• A fixed number of audited companies

What can happen if a CPA acts unethically?

• Mandatory retirement

• A formal apology

• Legal liability and penalties

• A temporary suspension

What does the AICPA's Code of Professional Conduct consist of?

• Only enforceable rules

• Principles, rules, and ethical rulings

• Financial guidelines

• Audit procedures

What principle should guide an accountant's professional conduct?

• Maximizing profit

• Following the boss's orders

• Maintaining public confidence

• Avoiding legal consequences

What is the consequence of not following the AICPA's ethical rulings?

• Justification of departure is required

• A fine

• Immediate dismissal

• Revocation of CPA license

What is the first step in resolving an ethical dilemma?

• Identifying the consequences of alternatives

• Deciding upon the appropriate action

• Obtaining all relevant facts

• Identifying the ethical dilemma

What is an ethical dilemma?

• A decision about financial investments

• Choosing between two profitable outcomes

• A situation requiring a choice between equally undesirable alternatives

• A clear-cut case of right and wrong

What might be a long-term consequence of working additional hours without charging them?

• Receiving a promotion

• Being asked to perform other unethical actions

• Increased salary

• More vacation time

Who is affected by the ethical dilemma in the case study?

• Only the senior auditor

• The entire firm and its clients

• Only the staff assistant

• Only the clients of the firm