Introduction to Accounting Ethics
1. Which of the following organizations establishes ethical frameworks for accountants?
A) International Federation of Accountants (IFAC)
B) Securities and Exchange Board of India (SEBI)
C) Indian Revenue Service (IRS)
D) Ministry of Corporate Affairs (MCA)
2. Which principle of accounting ethics ensures that accountants do not allow personal
bias to affect their judgment?
A) Integrity
B) Objectivity
C) Confidentiality
D) Professional Competence
3. What is the main role of professional skepticism in auditing?
A) Accepting financial reports at face value
B) Critically assessing audit evidence and identifying risks of fraud
C) Ensuring tax compliance
D) Maximizing shareholder wealth
4. Which of the following is NOT a fundamental principle of professional accounting
ethics?
A) Integrity
B) Objectivity
C) Confidentiality
D) Professional Competence and Due Care
5. Which of the following is an example of a self-interest threat to auditor independence?
A) The auditor provides both auditing and consulting services to the same client
B) The auditor refuses to disclose confidential client information
C) The auditor follows IFRS guidelines strictly
D) The auditor maintains professional skepticism during audits
6. Which of the following laws governs corporate governance and financial reporting in
India?
A) Companies Act, 2013
B) Foreign Exchange Management Act, 1999
C) Income Tax Act, 1961
D) Consumer Protection Act, 2019
7. What is the role of the National Financial Reporting Authority (NFRA) in India?
A) Monitor auditor compliance and investigate misconduct
B) Regulate stock market transactions
C) Oversee mergers and acquisitions
D) Issue tax policies
8. Corporate governance primarily aims to ensure which of the following?
A) High profitability
B) Effective management and control
C) Expansion of business
D) Employee satisfaction
9. Which of the following is NOT a principle of Corporate Governance?
A) Accountability
B) Transparency
C) Monopoly
D) Fairness
10. The OECD stands for:
A) Organization for Economic Cooperation and Development
B) Official Establishment of Economic Development
C) Organization for Ethical Corporate Development
D) Organization for Economic Corporate Development
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4. In Corporate Governance, stakeholders include:
A) Only shareholders
B) Only board members
C) Shareholders and other interested parties
D) Only the CEO
5. Which of the following is considered a major objective of Corporate Governance?
A) Increase taxation
B) Foster investment confidence
C) Minimize employee benefits
D) Create business monopolies
6. Corporate Governance in India is regulated primarily by:
A) RBI
B) SEBI
C) IRDAI
D) TRAI
7. The term ‘independent director’ refers to a director who:
A) Has major financial ties with the company
B) Is involved in daily operations
C) Does not have material relationships with the company
D) Is the CEO of the company
8. Which of the following is NOT a benefit of good Corporate Governance?
A) Enhances the company’s reputation
B) Reduces transparency
C) Improves risk management
D) Builds stakeholder trust
9. Which global organization has issued major principles for Corporate Governance?
A) IMF
B) UNESCO
C) OECD
D) WHO
10. In Corporate Governance, compliance primarily refers to:
A) Following fashion trends
B) Following regulatory frameworks and rules
C) Increasing employee turnover
D) Decreasing stakeholder engagement
