Deck 2: Ethical Principles and Reasoning

Question 1

If a CPA violates one of the Principles of the AICPA's Code of Professional Conduct, the CPA:

A) Will never be subject to disciplinary action by the AICPA
B) May lose the right to practice accounting for a period of time unless the violation was justified
C) Definitely will lose the right to practice accounting for a period of time unless the violation was justified
D) May or may not lose the right to practice accounting, depending on the severity of the violation

Answer 1

A

Question 2

Some societies believe that justice is best determined by juries comprised of ordinary citizens, but other societies believe that justice is best administered by judges. This is an example of:

A) Ethical relativism
B) Ethical absolutism, with certain groups differing in their application of a core ethical principle
C) The ethical standardization doctrine
D) Ethical self-determination

Answer 2

B

Question 3

One hallmark of a profession is:

A) Its members' unrelenting dedication to clients' interests over the countervailing public interest
B) Its classification as a profession by the U.S. Department of Labor
C) Its members' willingness to cooperate with clients by subordinating their judgments in deference to clients' desires
D) A member's exercise of independent judgment

Answer 3

D

Question 4

To act ethically, a person always must:

A) Follow the formal expression of a law
B) Follow both the spirit and the formal expression of a law
C) Do the right thing, even if violates a law
D) Adhere to the spirit, intent, and formal expression of a law

Question 5

Kohlberg's three levels of moral development, in order, focus on:

A) Self-interest, achieving justice, and achieving peer approval
B) Self-interest, adhering to principles over laws, and learning to disregard the need for peer approval
C) The avoidance of punishment, compliance with laws, and compliance with societal expectations
D) Self-interest, achieving peer approval, and the pursuit of justice

Question 6

According to the Responsibility Principle of the AICPA's Code of Professional Conduct, accountants should always:

A) Make sensitive moral judgments
B) Pursue the public interest
C) Maintain client confidentiality
D) Use the highest degree of care in performing all professional activities

Question 7

Legal mandates and ethical mandates are:

A) Identical
B) Different, with legal mandates usually imposing higher behavioral requirements than ethical mandates
C) Different, with ethical mandates usually imposing higher behavioral requirements than legal mandates
D) Both imposed on professional accountants, with legal mandates typically having broader application

Question 8

If a CPA violates the Principles section of the AICPA Code of Professional Conduct, the CPA is subject to professional disciplinary actions:

A) By the SEC or by the AICPA's Disciplinary Committee
B) By the state accountancy board in the state where the CPA practices accounting
C) Only if the CPA is still an active (non-retired) accounting practitioner
D) Never

Question 9

Self-regulation of the auditing profession in the United States:

A) Has always been, and remains, a distinguishing feature of the auditing profession
B) Historically has characterized the oversight of auditors of privately-held companies, but no longer does
C) Historically has characterized the oversight of auditors of publicly-held companies, but no longer does
D) Never has been a characteristic of the auditing profession because government understandably recognizes the need to assure strict compliance with ethical standards designed to protect the investing public

Question 10

The substantial similarity of the AICPA and IFAC Codes of Conduct tends to support the concept of:

A) The ethical conformity doctrine
B) Self-regulation
C) Ethical absolutism
D) Ethical relativism

Question 11

Creation of the PCAOB was an important event in the development of the accounting profession because it altered the accounting profession's historical policy of self-regulation in the area of:

A) Internal auditing
B) Tax return preparation
C) Tax advocacy on behalf of clients accused of fraud
D) External auditing of publicly-traded companies

Question 12

Ethical absolutism means that:

A) All cultures share a common set of ethical values
B) Ethical duties are absolute requirements that are, if necessary, imposed by laws
C) Value systems absolutely vary over time as societal views progress
D) A person has an absolute duty to follow ethical principles, even if they diverge from legal mandates

Question 13

In Kohlberg's Six Stages of Moral Development, striving to act in accordance with laws occurs at:

A) Stage 2
B) Stage 4
C) Stage 5
D) Stage 6

Question 14

The AICPA and IFAC Codes of Conduct are:

A) Substantially similar, but not identical
B) Identical, except that the AICPA Code applies to Certified Public Accountants and the IFAC Code applies to other professional accountants
C) Identical, except that the AICPA Code applies to accountants licensed in the United States and the IFAC Code applies to professional accountants licensed outside the United States
D) Identical, except that the AICPA Code applies to individual accountants and the IFAC Code applies to accounting firms and other organizations of accountants

Question 15

Which of the following principles of the AICPA Code of Conduct is not applicable to accountants employed in a financial reporting capacity at a corporation?

A) Independence
B) Integrity
C) Objectivity
D) Due care

Question 16

Which of the following is not one the four stages in Rest's Four-Component Model of Ethical Decision-Making?

A) Developing moral sensitivity
B) Developing sound moral judgment
C) Developing a willingness to challenge unjust laws
D) Developing the character to initiate actions

Question 17

An unethical act:

A) Is always illegal as well
B) Is not necessarily illegal
C) Must, at minimum, violate a government regulation
D) Is determined for the accounting profession by the FASB

Question 18

Which of the following is not expressly addressed by the principle of the AICPA Code of Conduct concerning integrity?

A) The duty to maintain objectivity
B) The duty to respect client personnel
C) The duty to not subordinate one's opinion in favor of the client's viewpoint
D) The duty to avoid conflicts of interest

Question 19

According to the Objectivity and Independence Principle of the AICPA's Code of Professional Conduct, accountants should always be independent in providing:

A) All professional services
B) All services to their employer
C) All audit services
D) All tax advisory services

Question 20

The usury laws:

A) Are an example of ethical absolutism
B) Are an example of ethical relativism
C) Bar excessively high interest rates on certain types of loans
D) Reflect the consensus among all countries that interest rates need to regulated by a universal body or multi-governmental entity

Question 21

One of Carol Gilligan's key conclusions is that:

A) Men are more ethical than women
B) Women are more ethical than men in resolving dilemmas that hinge on issues of fairness and justice
C) At higher stages of moral development, women are more focused on issues of compassion for those in need than men are
D) At higher stages of moral development, women are more focused on issues of equality of opportunity for all than men are

Question 22

Acting based on a desire to comply with a legal statute, even though you disagree with that statute, corresponds to which of the following stages of moral development?

A) The pre-conventional stage
B) The conventional stage
C) The post-conventional stage
D) All of the above

Question 23

Acting based on fear of punishment corresponds to which of the following stages of moral development?

A) The pre-conventional stage
B) The conventional stage
C) The post-conventional stage
D) All of the above

Question 24

Kohlberg concluded that most people's moral development reflects:

A) The conventional stage
B) The pre-conventional stage
C) The post-conventional stage
D) Unconventional activity that cannot be classified according to his model of behavior

Question 25

State and describe the six Principles of the AICPA Code of Professional Conduct.

Question 26

Acting in a manner that is inconsistent with the stated rules of a legal statute, knowing that your actions are incompatible with that statute, corresponds to which of the following stages of moral development?

A) The pre-conventional stage
B) The conventional stage
C) The post-conventional stage
D) All of the above

Question 27

What are the six stages of moral development, according to Kohlberg?

Question 28

Research the core principles of the IFAC Code of Conduct and compare them to the Principles of the AICPA Code of Professional Conduct. What are the differences? Are these differences important to you?

Question 29

Can you identify an ethical decision that an IRS agent might encounter?

Question 30

Of all of the characteristics of a profession, which one is the most important? Why?

Question 31

Discuss an ethical issue that you believe you resolved using a System 2 mental response.

Question 32

Acting based on fear of disappointing your close friends corresponds to which of the following stages of moral development?

A) The pre-conventional stage
B) The conventional stage
C) The post-conventional stage
D) All of the above

Question 33

What aspects of accounting practice reflect that accounting is a profession?

Question 34

What are the characteristics of a profession?

Question 35

Acting on principle, knowing that the party you hurt would have done the same thing if the roles had been reversed, corresponds to which of the following stages of moral development?

A) The pre-conventional stage
B) The conventional stage
C) The post-conventional stage
D) All of the above

Question 36

Do you believe that most ethical decision-making is made in accordance with a model or other framework? Why or why not?

Question 37

Discuss an ethical issue that you believe you resolved using a System 1 mental response.

Question 38

The term "System 1" is used to describe how our brains make ethical decisions in a:

A) Rapid, intuitive manner
B) Rigorously analytical manner
C) Dual-processing mode that utilizes all available mental resources
D) Single-processing mode that is deliberative and meticulous

Question 39

Carol Gilligan's key thesis is that:

A) Women are less willing to violate laws and established societal norms than men are
B) Women are less willing to engage in risky, unethical behavior than men are
C) Women are more focused on principles of compassion than principles of justice
D) Women have greater compassion for those who deviate from ethical norms than men have

Question 40

If a CPA who is a member of the AICPA fails to abide by the Principles section of the AICPA's Code of Professional Conduct, but otherwise acts in conformity with the Code, the CPA's membership in the AICPA will potentially be:

A) Suspended for a period of up to 30 days
B) Suspended for a period of up to one year
C) Revoked, with the right to apply for reinstatement after one year
D) Not subject to any form of punishment regarding the license to practice accounting