(College Department)

F
2NDSemester, Academic Year 2019 - 2020
MIDTERM EXAMINATION
CODE OF ETHICS
BSA 2ND YEAR

I. ESSAY:

1. CITE SECTION 11 CODE ETHICS -ACTIVITIES INCOMPATIBLE WITH PRACTICE OF

PUBLIC ACCOUNTANCY.
Answer:
Activities incompatible with practice of public accountancy states that a professional
accountant in public practice should not concurrently engage in any business,
occupation or activity which impairs or might impair integrity, objectivity or
independence, or the good reputation of the profession and therefore would be
incompatible with the rendering of professional services (Sec.11.1). However, according
to Section 11.2, the rendering of two or more types of professional services concurrently
does not by itself impair integrity, objectivity or independence. Moreover, the
simultaneous engagement in another business, occupation or activity unrelated to
professional services which has the effect of not allowing the professional accountant in
public practice properly to conduct a professional practice in accordance with the
fundamental ethical principles of the accountancy profession should be regarded as
inconsistent with the practice of public accountancy (sec.11.3) . In short the IFAC
proposed that auditors should be very vigorous in their work but considered that
integrity, objectivity, and independence were not undermined by providing other types of
service to the client.

2. WHAT IS THE RULE OF A PROFESSIONAL ACCOUNTANT IN PUBLIC PRACTICE

ENTRUSTED OF MONIES BELONGING TO OTHERS?
Answer:
The rule of a professional accountant in public practice entrusted of monies belonging to
others should:
a. Keep such monies separately from personal or firm monies;
b. Use such monies only for the purpose for which they are intended; and
c. At all times, be ready to account for those monies to any persons entitled to such
accounting.

3. WHEN CAN THE PUBLICITY BY INDIVIDUAL PROFESSIONAL ACCOUNTANT IN PUBLIC

PRACTICE BE ACCEPTABLE?

4. WHAT IS THE RULE REGARDING THE ISSUE OF BROCHURES AND FIRM

DIRECTORIES AS PER CODE OF ETHICS ?

11 - TRUE OR FALSE ( if FALSE DEFEND YOUR ANSWER)

1. -----------The rendering of two or more types of professional services concurrently does not by
itself impair intergrity, objectivity or independence.
2. -----------The professional accountant in public practice should not hold client’s monies if there
is a reason to believe that hey were obtained from, or are tobe used for illegal activities.
3. ----------- The proposed professional accountant in public practice should treat in the strictest
confidence, and give due weight to, any information provided by the existing accountant.
4. ------------Advertising and solicitation by individual professional accountant in public practice
are not permitted in the Philippines.
5. ------------ Any newspapers or magazines may be used to inform the public of the
establishment of a new practice, of changes in the composition of a partnership of professional
accountant in public practice.

PREPARED BY: NOTED BY: APPROVED BY:

ALBINA E. BALON BENJAMIN FRANKLIN SABUG DR. LEAH DIGO

INSTRUCTOR DEAN OF BME VPAA