Ethics and Independence
Expect 3-5 MCQs per sitting -- ethics and independence are among the most heavily tested AUD topics. The #1 AICPA trap is presenting an indirect financial interest scenario with a dollar amount that sounds small, baiting you into answering 'not impaired' when the interest is actually material to the CPA. A detail many candidates miss: under the AICPA Code ET 1.255, the self-review threat has specific safe-harbor provisions for nonissuers that do NOT apply to issuers under SOX. Key standards: AU-C 200 (professional skepticism and objectivity), AICPA Code of Professional Conduct ET 1.200-1.299 (independence rules), and SOX Sections 201-206 (issuer prohibitions).
CPA Exam Lab is an independent study resource and is not affiliated with, endorsed by, or sponsored by the AICPA® or NASBA. Practice questions are original content created for study purposes. “CPA” is a registered trademark of the AICPA.
What AICPA Wants You to Know
- 1Identify the conceptual framework approach to independence
- 2Distinguish between independence in fact and independence in appearance
- 3Apply the threats and safeguards approach to independence
- 4Recognize prohibited financial interests and relationships
- 5Understand the AICPA Code of Professional Conduct requirements
- 6Apply SOX independence requirements for issuers