American Institute of Certified Public Accountants (AICPA) Practice Exam

What happens if a covered member accepts more than a token gift from a client?

1. Independence may be impaired

2. It enhances the relationship

3. There are no consequences

4. Only if the firm is not aware

The correct answer is: Independence may be impaired

Accepting more than a token gift from a client can impair a covered member's independence, which is crucial for maintaining objectivity and impartiality in professional accounting practices. The AICPA’s Code of Professional Conduct emphasizes that covered members, who include individuals providing audit or any other attest service, must avoid situations that could create conflicts of interest. Gifts that are too generous may create an obligation or perceived favoritism that could influence the covered member's judgment, potentially undermining the trust and credibility that are essential in public accounting. Independence is a foundational principle that ensures auditors remain unbiased and maintain a professional distance from their clients. When a covered member accepts a significant gift, it can raise questions about their ability to make decisions free from external influences, thus harming the perception of integrity in the audit process. Therefore, the acceptance of such gifts is managed strictly to uphold ethical standards and professional skepticism in the performance of audits and other services. In contrast, while enhancing the relationship may seem like a positive outcome of accepting gifts, it does not align with the ethical framework governing auditors’ behaviors, which prioritizes independence over personal relationships. The idea that there are no consequences is misleading, as accepting gifts can lead to profound professional ramifications. Lastly, the notion that independence