ACYAUDI: 2021 Code of Ethics for Professional Accountants in the Philippines

Which of the following is incorrect regarding integrity and objectivity?

a. Integrity implies not merely honesty but fair dealing and truthfulness

b. The principle of objectivity imposes the obligation on all professional accountants to be fair, intellectually honest and free of conflicts of interest

c. Professional accountants serve in many different capacities and should demonstrate their objectivity in varying circumstances

d. Professional accountants should neither accept nor offer any gifts or entertainment

d. Professional accountants should neither accept nor offer any gifts or entertainment

CORRECTION: ALLOWED if inconsequential

Which of the following is incorrect regarding independence?

a. Independence consists of independence of mind and independence in appearance

b. Independence of mind is the state of mind that permits the provision of an opinion without being affected by influences that compromise professional judgment, allowing an individual to act with integrity, and exercise objectivity and professional skepticism

c. Independence in appearance is the avoidance of facts and circumstances that are so significant a reasonable and informed third party, having knowledge of all relevant information, including any safeguards applied, would reasonably conclude a firm's or a member of the assurance team’s integrity, objectivity or professional skepticism had been compromised

d. Independence is a combination of impartiality, intellectual honesty and a freedom from conflicts of interest

d. Independence is a combination of impartiality, intellectual honesty and a freedom from conflicts of interest

CORRECTION: Objectivity NOT independenc

A CPA, while performing an audit, strives to achieve independence in appearance in order to

a. Reduce risk and liability

b. Comply with the generally accepted standards of field work

c. Become independent in fact

d. Maintain public confidence in the profession

d. Maintain public confidence in the profession

The principle of professional behavior requires a professional accountant to

a. Be straightforward and honest in performing professional services

b. Be fair and should not allow prejudice or bias, conflict of interest or influence of others to override objectivity

c. Perform professional services with due care, competence and diligence

d. Act in a manner consistent with the good reputation of the profession and refrain from any conduct which might bring discredit to the profession

d. Act in a manner consistent with the good reputation of the profession and refrain from any conduct which might bring discredit to the profession

A professional accountant has a professional duty or right to disclose confidential information in each of the following, except

a. To comply with technical standards and ethics requirements

b. To disclose to BIR fraudulent scheme committed by the client on payment of income tax

c. To comply with the quality review of a member body or professional body

d. To respond to an inquiry or investigation by a member body or regulatory body

b. To disclose to BIR fraudulent scheme committed by the client on payment of income tax

Occurs when a firm or a member of the assurance team could benefit from a financial interest in, or other self-interest conflict with, an assurance client

a. Self-interest threat

b. Advocacy threat

c. Self-review threat

d. Familiarity threat

a. Self-interest threat

Occurs when any product or judgment of a previous assurance engagement or non-assurance engagement needs to be re-evaluated in reaching conclusions on the assurance engagement or when a member of the assurance team was previously a director or officer of the assurance client or was an employee in a position to exert direct and significant influence over the subject matter of the assurance engagement.

a. Self-interest threat

b. Advocacy threat

c. Self-review threat

d. Familiarity threat

c. Self-review threat

A CPA-lawyer, acting as a legal counsel to one of his audit client, is an example of

a. Self-interest threat

b. Advocacy threat

c. Self-review threat

d. Familiarity threat

b. Advocacy threat

Intimidation threat

a. Is not a threat to independence

b. 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

c. 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

d. 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

b. 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

a. Self-interest threat

b. Advocacy threat

c. Self-review threat

d. Familiarity threat

d. Familiarity threat