The Multiple Choice Questions Blog

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.

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.

• Management threat

Select ONE answer:

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

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 – 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 other threats.
2. Not correct
3. Not correct
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.

• Self-interest threat

Select ONE answer:

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

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 – 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 other threats.

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

Which ONE of the following statements best describes ethical guidance in the UK?

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 – Although there are some specific ‘rules’, most ethical guidance is in the form of principles, the spirit of which should be followed by the assurance provider.
4. Not correct

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

Which ONE of the following bodies does NOT issue ethical guidance?

Select ONE answer:

1. ICAEW
2. IAASB
3. IESBA
4. FRC

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 – The IAASB issues ISAs but does NOT currently issue ethical guidance.
3. Not correct
4. Not correct

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