Ethics Definitions

A professional finance setting with ethical symbols like scales of justice, financial documents, and a person thoughtfully analyzing data.

Ethics in Finance Quiz

Test your knowledge on the essential ethical principles that underpin financial practices. This quiz covers various topics related to ethics definitions and safeguards in the finance industry.

Whether you're a student, professional, or just curious, this quiz will help you enhance your understanding of finance ethics.

12 Questions3 MinutesCreated by ReflectingTruth247

Please define 'Self-Interest' Threat

A threat to objectivity if any product or judgement of the member or the firm needs to be re-evaluated

A threat to a member's integrity or objectivity may stem from a financial or other conflict

A threat because of a close or personal relationship

Member may be deterred from acting objectively by threats actual or perceived

Name the two fundamental qualitative characteristics of financial statements

Comparability

Timeliness

Relevance

Faithful Representation

Please select two safeguards in the work environment

Employ unskilled workers

Appropriate disciplinary processes

Leadership that stresses the importance of ethical behaviour

Leadership that focuses on getting the work complete

What does Integrity mean?

Not allow bias

Duty to maintain professional knowledge

Should not disclose information to third parties

Being straightforward and honest

Please define 'Familiarity Threat'

A threat to objectivity if any product or judgement of the member or the firm needs to be re-evaluated

A threat to a member's integrity or objectivity may

A threat because of a close or personal relationship

Member may be deterred from acting objectively

What is a going concern?

Assumes there are financial concerns for the entity

Assumes the entity will continue

Assumes the entity will continue in operation for the foreseeable future

Assumes the entity will continue at the moment but cannot continue forever

What is 'the accounting equation'?

Total assets = current assets + non-current assets

Total liabilities = non-current liabilities + current liabilities

Assets = equity + liabilities

Total = equity + liabilities

What is the definition of Confidentiality?

Should not disclose information to third parties

Straightforward and honest

Not allow bias, conflict or interest or undue influence of others

Should not act unprofessional or does not comply with relevant laws and regulations

What is the definition of Understandability?

Users can compare with previous years and with similar businesses

Information is presented clearly and concisely

Users are assured of information

Users receive information in time to make decisions

What does 'Professional Competence and due care' mean?

Should not act unprofessionally

Duty to maintain professional knowledge

Straightforward and honest

Not allow bias

What is the meaning of 'Advocacy Threat'?

Member promotes a position or opinion to the point that subsequent objectivity may be compromised

Threat to objectivity if any product or judgement of the member or the firm needs to be re-evaluated

A threat to a member's integrity or objectivity may stem from a financial or other self-interest conflict

Because of close or personal relationship

When measuring the elements of financial statements, what is current cost?

Assets are recorded at the amount of cash paid to acquire them

Assets are carried at their price now; not their original price purchased

Amount which could currently be obtained by an orderly disposal

Present discounted value of the future net cash inflows that the item is expected to generate in normal cause of business

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