According to the AICPA Code of Professional Conduct, which of the following actions by a CPA would be considered a violation of the 'Integrity and Objectivity' rule?

Answer options:

Accepting a commission for referring a product to a non-audit client, with full disclosure.

Knowingly making a materially false and misleading entry in a client's financial records.

Serving as a trustee for an estate that owns immaterial stock in a bank audit client.

Differing in opinion with a supervisor regarding an accounting issue.

How to approach this question

Look for the option that implies dishonesty or misrepresentation of facts.

Full Answer

B.Knowingly making a materially false and misleading entry in a client's financial records.✓ Correct

Knowingly making a materially false and misleading entry in a client's financial records.

The Integrity and Objectivity rule prohibits a member from knowingly misrepresenting facts or subordinating their judgment to others. Making a false entry is a clear violation.

Common mistakes

Confusing independence rules (trustee) with integrity rules.

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