The Multiple Choice Questions Blog

There are two main approaches to a code of professional ethics: a rules-based ethical code and a principles-based code.

Indicate whether the following statement is true, false, not relevant or depends on the situation.

• A rules-based code requires a professional accountant to identify, evaluate and address threats to compliance with fundamental ethical principles.

Select ONE answer:

1. True
2. False
3. Is not relevant
4. Depends on the situation

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct – A rules-based code does not require auditor adherence to a set of principles.
3. Not correct
4. Not correct

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There are two main approaches to a code of professional ethics: a rules-based ethical code and a principles-based code.

Indicate whether the following statement is true, false, not relevant or depends on the situation.

• A principles-based code requires a professional accountant to comply with a set of specific rules.

Select ONE answer:

1. False
2. True
3. Is not relevant
4. Depends on the situation

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct – A principles-based code does not contain specific rules for auditor compliance.
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Which ONE of the following is NOT a valid reason why independence and objectivity are important to the assurance profession?

Select ONE answer:

1. The public’s expectations of accountants
2. Public interest in financial information
3. Credibility of published financial information
4. Tradition

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct – Tradition is not a valid reason why objectivity and independence matter.

This work is licensed under a Creative Commons Attribution 4.0 International License.

For each of the following threats, select whether they are identified by the IESBA Code only, the FRC’s Ethical Standard only, both the IESBA Code and the FRC Ethical Standard or neither the IESBA Code nor the FRC Ethical Standard.

• Self-Review threat

Select ONE answer:

1. Ethical guidance provides a set of rules which must be followed in all circumstances
2. Ethical guidance provides a set of principles which can be applied at the discretion of the assurance provider
3. Ethical guidance is a framework containing a combination of rules and principles the application of which is dependent on the professional judgement of the assurance provider based on the specific circumstances
4. Ethical guidance is a series of legal requirements

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct – Both the IESBA Code of Ethics and the FRC Ethical Standard identify the following five threats: self-interest, self-review, advocacy, familiarity and intimidation. The FRC Ethical Standard also identifies the management threat in addition; the IESBA Code of Ethics does not specify a ‘management threat’ as such, but notes that the assumption of ‘management responsibilities’ would create either threats.
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

For each of the following threats, select whether they are identified by the IESBA Code only, the FRC’s Ethical Standard only, both the IESBA Code and the FRC Ethical Standard or neither the IESBA Code nor the FRC Ethical Standard.

• Familiarity threat

Select ONE answer:

1. Neither
2. Both
3. FRC’s Ethical Standard only
4. IESBA Code only

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct – Both the IESBA Code of Ethics and the FRC Ethical Standard identify the following five threats: self-interest, self-review, advocacy, familiarity and intimidation. The FRC Ethical Standard also identifies the management threat in addition; the IESBA Code of Ethics does not specify a ‘management threat’ as such, but notes that the assumption of ‘management responsibilities’ would create either threats.
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.