PM 1208 Chapter 13

What is the primary purpose of ethical standards in accounting?

• To increase accounting complexity

• To ensure accuracy, integrity, and transparency in financial reporting

• To allow accountants to manipulate financial data

• To eliminate financial reporting requirements

Which of the following is NOT a fundamental principle of accounting ethics?

• Integrity

• Objectivity

• Deception

• Professional competence

Why is professional skepticism important in accounting ethics?

• It allows accountants to question and verify financial information

• It promotes favoritism in financial reporting

• It eliminates the need for audits

• It encourages fraudulent activities

Which organization establishes ethical guidelines for professional accountants worldwide?

• International Federation of Accountants (IFAC)

• National Football League (NFL)

• World Health Organization (WHO)

• NASA

What is a common consequence of unethical behavior in accounting?

• Increased public trust in financial statements

• Legal penalties and financial losses

• Enhanced company reputation

• Greater employee satisfaction

Which of the following is an example of unethical accounting behavior?

• Accurately reporting financial transactions

• Engaging in fraudulent financial reporting

• Following accounting standards and regulations

• Conducting internal audits to detect errors

What was one of the major consequences of the Enron accounting scandal?

• Strengthening of financial markets

• Introduction of the Sarbanes-Oxley Act (SOX)

• Increased investor confidence

• Elimination of accounting ethics

How does unethical accounting behavior affect investors?

• It increases investor confidence

• It leads to financial misrepresentation and potential losses

• It ensures fair and transparent financial markets

• It has no impact on investment decisions

What is the primary purpose of a code of conduct in accounting?

• To guide accountants in ethical decision-making

• To allow manipulation of financial statements

• To encourage accountants to ignore regulations

• To avoid responsibility for financial reporting

Which of the following is a key element of an accountant's code of conduct?

• Integrity and objectivity

• Deception and dishonesty

• Favoritism and bias

• Lack of accountability