IFI Chap2

Ethics are

• needed in the professions, but is not needed for society in general.

• a set of moral principles or values.

• not formed by life experiences.

• always incorporated in laws.

________ means that a person acts according to conscience, regardless of the situation

• Caring

• Fairness

• Integrity

• Respect

What is the importance of ethics?

• It is only needed in professional settings.

• It is a set of moral principles or values.

• It is irrelevant in society.

• It is always incorporated in laws.

Which quality means acting according to conscience, regardless of the situation?

• Caring

• Fairness

• Integrity

• Respect

Which of the following is a prescribed set of moral principles or values?

• codes of business ethics for professional groups

• laws and regulations

• codes of conduct within an organization

• all of the above

The underlying reason for a code of professional conduct for any profession is

• A) the need for public confidence in the quality of service of the profession.

• B) it provides a safeguard to keep unscrupulous people out.

• C) it is required by federal legislation.

• D) it allows licensing agencies to have a yardstick to measure deficient behavior.

Which of the following statements is true when the CPA has been engaged to perform an audit of financial statements?

• A) The CPA firm is engaged and paid by the client; therefore, the firm has primary responsibility to be an advocate for the client.

• B) The CPA firm is engaged and paid by the client, but the primary beneficiaries of the audit are those who rely on the financial statements.

• C) Should a situation arise where there is no convincing authoritative standard available, and there is a choice of actions which could impact a client's financial statements, the CPA is free to endorse the choice which is in the investors' interests.

• D) The CPA firm has primary responsibility to the FASB.

A CPA performs bookkeeping services for a client and then performs an audit of those financial statements. This is an example of a ________ threat.

• A) familiarity

• B) self-interest

• C) self-review

• D) management participation

Since the rules cannot address all circumstances, the Code includes a conceptual framework approach for members to use to evaluate threats to compliance. Using this framework,

• A) the first step is to discuss the threat with the client's management team.

• B) all threats must be completely eliminated.

• C) safeguards can be used to eliminate any threat.

• D) more than one safeguard may be necessary.

When a member observes the profession's technical and ethical standards and strives to continually improve her competence and quality of services, she is exercising

• A) due care.

• B) integrity.

• C) independence.

• D) objectivity.