Code of Ethics

What is the correct order of how the new Code is structured?

I. Complying with the Code, Fundamental principles, and Conceptual Framework

II. Professional Accountants in Public Practice

III. International Independence Standards

IV. Professional Accountants in Business

V. Glossary

• I, ii, iii, iv, v

• I, iv, ii, iii, v

• I, v, ii, iv, iii

• I, ii, iv, iii (iv is not part of the code structure)

This is the distinguishing mark of the accountancy profession as noted in the 2018 Code of Ethics.

• Acceptance of the responsibility to act in the public interest

• Ability to sign audit reports of clients in various industries

• Satisfaction of the needs of an individual client or employing organization

• Competence and capability to execute and conform with the auditing and accounting standards

When applying the conceptual framework, the professional accountant shall:

• Exercise professional judgment

• Remain alert for new information and to changes in facts and circumstances

• Use the reasonable and informed third party test

• All of the above

This is the fundamental principle of ethics which is characterized as “to comply with relevant laws and regulations and avoid any conduct that the professional accountant knows or should know might discredit the profession.”

• Integrity

• Objectivity

• Professional Behavior

• Professional Competence and Due Care

Which of the following statements appropriately relates to independence as denoted by the Handbook?

• Required for professional accountants in business

• Linked to the principles of objectivity and integrity.

• Relates to independence of mind but not of appearance

• Exclusively applicable to audits and review engagements

In order to achieve the objectives of the accountancy profession, professional accountants have to observe a number of prerequisites or fundamental principles. The fundamental principles include the following, except:

• Objectivity

• Professional Competence and due Care

• Confidentiality

• Confidence

For assurance engagements provided to an audit client, the following should be independent of the client:

• The members of the assurance team (YES OR NO)

• The firm (YES OR NO)

• Network firms (YES OR NO)

• YES, YES, YES

• YES, YES, NO

• YES, NO, NO

• YES, NO, YES

Intimidation threat:

• Is not a threat to independence.

• Occurs when a member of the assurance team may be deterred from acting objectively and exercising professional skepticism by threats, actual or perceived, from the directors, officers or employees of an assurance client.

• Occurs when, by virtue of a close relationship with an assurance client, its directors, officers or employees, a firm or a member of the assurance team becomes too sympathetic to the client’s interests.

• Occurs when a firm, or a member of the assurance team, promotes, or may be perceived to promote, an assurance client’s position or opinion to the point that objectivity may, or may be perceived to be, compromised.

A level at which a professional accountant using the reasonable and informed third party test would likely conclude that the accountant complies with the fundamental principles.

• Reasonable assurance

• Confidence level

• Assurance level

• Acceptable level

A consideration by the professional accountant about whether the same conclusions would likely be reached by another entity.

• Reasonable and informed third party test

• Reverse and informed third party test

• Swab test

• Consultation