Exam 1: Ethical Issues in Advanced Accounting

According to the AICPA's Principles of Professional Conduct, integrity requires an AICPA member to observe both the form and the spirit of technical and ethical standards.

According to the Treadway Commission, direct responsibility for the financial statements of a publicly owned business enterprise is attributed to the enterprise's:

According to the AICPA's Principles of Professional Conduct, does integrity require AICPA members to observe the principles of:

Specific recommendations for resolution of ethical conduct are provided by the ethics code or codes of the:

Avoidance of discreditable acts is required by the ethics code or codes of the:

Lawrence Knight, CPA, controller of Marvello Company, a publicly owned business enterprise, is a member of the Institute of Management Accountants. On June 30, 2006, the end of Marvello's fiscal year, Knight is instructed by his supervisor, Chief Financial Officer Ernest Coburn, to recognize as revenue a $100,000 shipment of merchandise to a customer, terms "on approval," on that date. Knight does not consider that the earnings process required for the recognition of revenue has been met for the shipment. As a member of the IMA, what should Lawrence Knight do? Explain.

Does the AICPA Council resolution designating bodies to promulgate technical standards include the:

Several of the executives who perpetrated the Equity Funding Corporation of America fraud were CPAs with public accounting experience.

Management accountants are obligated solely for their own compliance with the IMA's Standards of Ethical Conduct for Members.

Although members of the AICPA not in public practice cannot maintain the appearance of independence, they must maintain objectivity in rendering professional services.

The Report of the National Commission on Fraudulent Financial Reporting provided to both private and public companies recommendations for curbing fraudulent financial reporting.

Rule 201, "General Standards," of the AICPA's Rules of Professional Conduct deals with all except:

The current FEI Code of Ethics addresses both business and personal affairs of FEI members.