ETHICS IN ACCOUNTING

CHAPTER 1

1. What is the primary objective of ethics in accounting?

a. Maximizing profits
b. Ensuring fair financial reporting
c. Minimizing expenses
d. Expanding market share
Answer: b. Ensuring fair financial reporting
2. What does the term "ethics" in accounting refer to?
a. Legal regulations
b. Professional standards of conduct
c. Business strategies
d. Marketing practices
Answer: b. Professional standards of conduct
3. The nature of ethics in accounting is best described as:
a. Subjective
b. Relative
c. Objective
d. Arbitrary
Answer: c. Objective
4. What is a key feature of ethical behavior in accounting?
a. Ambiguity
b. Transparency
c. Secrecy
d. Complexity
Answer: b. Transparency
5. In the scope of ethics in accounting, what does "confidentiality" mean?
a. Sharing financial information with competitors
b. Keeping financial information private and secure
c. Publicizing sensitive financial data
d. Ignoring financial privacy
Answer: b. Keeping financial information private and secure
6. Which of the following is a benefit of ethical behavior in accounting?
a. Increased legal risks
b. Erosion of public trust
c. Financial fraud
d. Enhanced reputation and credibility
Answer: d. Enhanced reputation and credibility
 7. What does "whistleblowing" refer to in the context of accounting ethics?
a. Reporting unethical behavior to authorities
b. Keeping silent about ethical concerns
c. Encouraging unethical practices
d. Ignoring professional standards
Answer: a. Reporting unethical behavior to authorities
8. The primary focus of ethical accounting is on:
a. Maximizing shareholder wealth
b. Achieving personal goals
c. Ensuring the integrity of financial information
d. Ignoring stakeholder interests
Answer: c. Ensuring the integrity of financial information
9. What is the primary purpose of a code of ethics in accounting?
a. Promoting unethical behavior
b. Providing guidelines for ethical conduct
c. Reducing transparency
d. Encouraging fraud
Answer: b. Providing guidelines for ethical conduct
10. What is the role of independence in accounting ethics?
a. Ignoring conflicts of interest
b. Objectivity and impartiality
c. Advocating biased financial reporting
d. Fostering collusion
Answer: b. Objectivity and impartiality
11. Ethics in accounting is essential for:
a. Manipulating financial statements
b. Maintaining public distrust
c. Facilitating fraudulent activities
d. Upholding the public interest
Answer: d. Upholding the public interest
12. The ethical responsibility of accountants includes:
a. Minimizing transparency
b. Manipulating financial records
c. Advancing personal interests
d. Safeguarding the public interest
Answer: d. Safeguarding the public interest
13. What does "integrity" mean in the context of accounting ethics?
a. Compromising professional standards
b. Consistency in financial reporting
 c. Concealing financial information
d. Ignoring ethical principles
Answer: b. Consistency in financial reporting
14. Which of the following is a limitation of ethical codes in accounting?
a. Encouraging unethical behavior
b. Creating confusion
c. Fostering transparency
d. Enhancing public trust
Answer: b. Creating confusion
15. What is the significance of ethical leadership in accounting?
a. Promoting fraudulent activities
b. Setting an example for ethical behavior
c. Ignoring ethical principles
d. Fostering a culture of dishonesty
Answer: b. Setting an example for ethical behavior
16. The scope of accounting ethics includes:
a. Ignoring stakeholder interests
b. Manipulating financial information
c. Financial reporting, auditing, and tax planning
d. Avoiding transparency
Answer: c. Financial reporting, auditing, and tax planning
17. What is the primary consequence of unethical behavior in accounting?
a. Improved reputation
b. Public trust and confidence
c. Legal consequences and damage to credibility
d. Enhanced financial performance
Answer: c. Legal consequences and damage to credibility
18. The ethical duty to maintain professional competence involves:
a. Ignoring ongoing education
b. Pursuing continuous learning and development
c. Neglecting skills and knowledge
d. Advocating ignorance
Answer: b. Pursuing continuous learning and development
19. The concept of "fair presentation" in accounting ethics refers to:
a. Manipulating financial information
b. Presenting information in a biased manner
c. Providing a true and fair view of financial statements
d. Ignoring the needs of stakeholders
Answer: c. Providing a true and fair view of financial statements
 20. Ethics in accounting contributes to:
a. Weakening the credibility of financial information
b. Undermining the profession's reputation
c. Strengthening public trust in financial reporting
d. Encouraging financial fraud
Answer: c. Strengthening public trust in financial reporting