CODE

1. Which of the following are recognized threats to independence and objectivity

as identified in ACCA's Code of Ethics and Conduct?
(1) Familiarity
(2) Self-interest
(3) Integrity
(4) Advocacy
A (1),(2),(3) and (4)
B (1),(2) and (4)
C (2),(3) and (4)
D (2) and (4) only
2. AAB & Co is the statuary auditor of Y & Co, a public interest entity. Which of
the following services is AAB & Co prohibited from providing to Y & Co under
any circumstances?
A Provision of bookkeeping services
B Assistance in the resolution of tax disputes
C Internal audit services
D Valuation services where the valuation will have a material effect on the
financial statements
3. AB & Co audits DEF Co. in accordance with ACCA Code of Ethics and Conduct
which two of the following circumstances would constitute a threat to
objectivity?
(1) An employee of AB & Co owns shares in DEF Co but is not a part of the
audit team
(2) The best friend of the engagement partner owns a significant indirect
financial interest in DEF Co
(3) The audit manager of DEF Co owns a small number of shares in DEF Co
(4) The husband of the audit partner owns shares in DEF Co
A (1) and (2)
B (1) and (4)
C (2) and (4)
D (3) and (4)
4. A private company has requested that it's auditor prepare a valuation report
on a prospective acquisition target in order to help it obtain finance for
acquisition from its bank. Which two of the following threats may arise if the
auditor agrees to take on this assignment?
A Self-review threat
B Familiarity threat
C Advocacy threat
D Self-interest threat

5. Which of the following statements best reflects the auditor's duty of

confidentiality?
A Auditors must never, under any circumstances ,disclose any matters of
which they become aware of during the course of the audit to third parties,
without the permission of the client
B Auditors may disclose any matters in relation to criminal activities to the
police or taxation authorities ,if requested to do so by the police or a tax
inspector.
C Auditors may disclose matters to third parties without their client's consent
if it is in the public interest, and they must do so if there is a statutory duty
to do so.
D Auditors may only disclose matters to third parties without their client's
consent if the public interest A Auditors must is at risk or national security is
involved.
6. Which of the following is the correct definition of 'integrity' in accordance with
ACCA Code of Ethics and Conduct?
A To not allow bias, conflict of interest or undue influence of others to
override professional or business judgements
B To maintain a professional knowledge and skill at the level required to
ensure that a client or employer receives competent professional services
based on current developments in practice, legislation and techniques and
act diligently and in accordance with applicable technical and professional
standards
C To comply with relevant laws and regulations and should avoid any action
that discredits the profession
D To be straightforward and honest in all business and professional
relationships

7. Which two of the following are fundamental principles as stated in the ACCA's
Code of Ethics and Conducts?
(1) Objectivity
(2) Independence
(3) Confidentiality
(4) Professional scepticism
A (1) and (4)
B (1) and (2)
C (2) and (3)
D (1) and (3)