FP2 3.05 Fiduciary Standard of Care

According to the AICPA Professional Code of Conduct, which of the following is NOT considered a duty of a fiduciary?

• Objectivity

• Integrity

• Providing audit services

• Freedom of conflicts of interest

Which of the following is NOT one of the three elements present in a client relationship where an accountant is considered a fiduciary?

• The accountant is an expert in an aspect of business.

• The client places a high degree of trust and confidence in the accountant.

• The client is heavily dependent upon the accountant's advice.

• The accountant provides legal representation.

Who is considered a fiduciary to his or her advisory clients as per the document?

• Any accountant providing tax services

• A registered investment adviser

• An accountant providing general business consulting

• All accountants providing audit services

What is the purpose of the "Prudent Practices for Investment Advisors" handbook authorized by the AICPA PFP Executive Committee?

• To provide legal representation for investment advisors

• To set industry best practices for fiduciaries providing comprehensive and continuous investment advice

• To offer a detailed financial report for investment advisors

• To establish a new code of conduct for accountants

What is the role of the "Legal Memorandums for Prudent Investment Practices"?

• To serve as a legal binding contract for investment practices

• To act as a detailed financial report for investment advisors

• To highlight legal bases underlying the practices set out in the handbooks

• To provide a new set of financial regulations for accountants

What is the primary goal of the AICPA when it comes to setting ethical standards for accountants?

• To ensure accountants are well-compensated

• To promote transparency and trust in the accounting profession

• To regulate the number of accountants in the industry

• To limit the services accountants can offer

Which of the following best describes the concept of 'due care' in the context of the AICPA Professional Code of Conduct?

• Ensuring that services are provided with the competence and diligence that is reasonable

• Providing services for free to those who cannot afford them

• Limiting services to only those in which the accountant is certified

• Offering services only to longstanding clients

Under the AICPA Code of Conduct, which of the following is NOT a principle that guides the conduct of professional accountants?

• Responsibility to act in the public interest

• Integrity and honesty in all professional relationships

• Guaranteeing financial success for clients

• Observance of professional standards and continual improvement