Week 2 - Professional Ethics and Conduct
Test Your Knowledge on Professional Ethics and Conduct
Are you well-versed in professional ethics and conduct? Take this engaging quiz to assess your understanding of the fundamental principles that govern ethical behavior in the corporate world. This quiz covers important topics like auditor independence, self-regulation, and ethical theories.
- 10 multiple choice questions
- Gain insights into your ethical knowledge
- Immediate feedback on your performance
Which of the following characteristics does not distinguish a profession from other occupations?
Ability to command high fees in return for services.
Mastery of particular intellectual skills through education and training.
A common code of conduct to be practiced and monitored by an association.
Acceptance to a duty to society as a whole.
Self-regulation means that a profession has autonomy in the discharge of its services. How have the corporate collapses of the early 2000s affected the self-regulatory regime of the auditing profession?
The auditing profession has gained extensive publicity and influence in the stock market.
The increased demand for reforms has resulted in the profession losing its self-regulatory power.
Auditors have become police for the corporate sector, with their increased role of reporting to ASIC.
Auditors are seen to have an important role in corporate management.
John resigned from an assurance engagement because his independence was impaired. He was concerned that if he did not resign then ASIC would have a case against the firm and its reputation would suffer as a result. This is an example of:
Consequentialism.
Non-consequentialism.
Virtue ethics.
Ethical relativism.
Ethical relativism means:
Adopting an international standard of behaviour for organisations.
Moral values are relative to a particular environment.
Instituting company policies on gifts and hospitality.
Developing a system that international businesses can apply everywhere.
The fundamental ethical characteristics required of professional accountants are:
Professionalism, experience, and expertise.
Authority, community sanction and knowledge.
Competence, objectivity and integrity.
Self interest, self review, and familiarity.
Threats to auditor independence can come from various sources. Which of these is referred to in the Code of Ethics as a self-review threat?
The possibility of potential employment with the audit client.
Preparation of original data used to generate financial statements that is the subject matter of the audit engagement.
Concern on the part of the auditor about the possibility of losing the engagement.
Pressure to reduce inappropriately the extent of work performed in order to reduce fees.
The significance of economic, financial, and other relationships in determining independence in appearance is evaluated by:
What the auditor general decides is significant.
What the auditor believes is acceptable.
What the company deems to be unacceptable.
What a reasonable and informed third party would conclude as unacceptable.
Self-interest or self-review threats may result from the following except:
Executing authority on behalf of the client on transactions.
Preparing source documents for the client to evidence the occurrence of transactions.
Reporting to the CEO on a system which you helped implement.
Writing a letter to the management to inform them of the discrepancies in the system.
Using the same senior personnel on an assurance engagement over a long period of time may create what type of threat to auditor independence?
Self-interest
Advocacy
Familiarity
Intimidation.
The Sarbanes-Oxley Act is seen to be different from other reforms because: (i) it is rules based and has extensive prescriptive measures to restrict an auditors involvement with audit clients, (ii) it covers a number of aspects of corporate governance and audit independence issues, (iii) it introduces an independent governmental oversight body to effectively eliminate audit self-regulation.
(i) only
(i) and (ii) only
(ii) and (iii) only
(i) and (iii) only
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