Certified Internal Auditor (CIA) Practice Test

What is one of the primary purposes of an accounting association establishing a code of ethics?

1. The outline criteria for professional behavior to maintain standards of integrity and objectivity

2. To establish standards to follow for effective accounting practice

3. To provide a framework within which accounting policies could be effectively developed and executed

4. The outline criteria that can be used in conducting interviews of potential new accountants

The correct answer is: The outline criteria for professional behavior to maintain standards of integrity and objectivity

The primary purpose of an accounting association establishing a code of ethics is to outline criteria for professional behavior that maintains standards of integrity and objectivity. A code of ethics serves as a foundational document that guides accountants in their professional conduct, ensuring that they act in a manner that upholds the values of honesty, transparency, and fairness. By providing clear standards and expectations, the code fosters trust between the public, clients, and the accountancy profession. It emphasizes the importance of ethical decision-making, which is crucial in preserving the credibility of the accounting profession. This trust is essential for the ongoing viability of the profession, as ethical lapses can lead to significant reputational damage and loss of public confidence. While establishing standards for effective accounting practice, developing accounting policies, and providing guidelines for interviews are important aspects of the profession, they are secondary to the fundamental need for upholding ethical standards. Integrity and objectivity are cornerstones of the profession, and without a strong ethical framework, the effectiveness and reputation of the accounting field would be compromised.