American Institute of Certified Public Accountants (AICPA) Practice Exam

Providing tax services to both parties in a divorce is seen as impairing a CPA's objectivity?

1. True

2. False

3. Only if the parties have a disagreement

4. Only if one party is unsatisfied

The correct answer is: False

The assertion that providing tax services to both parties in a divorce does not inherently impair a CPA's objectivity is based on the understanding of the nature of the relationship and the duties of the CPA. Objectivity is a fundamental ethical principle for CPAs, and it requires that they maintain a neutral and unbiased stance in their professional engagements. In circumstances where a CPA provides services to both parties involved in a divorce, it is essential for the CPA to remain impartial and ensure that their advice does not favor one client over the other. This can be effectively managed through clear communication and by establishing boundaries regarding the scope of services provided to each party. If both parties are in agreement and seeking the same outcomes—such as the fair division of taxable assets—the CPA can operate without a conflict of interest. It's when there are disagreements or one party feels disadvantaged that concerns about objectivity arise, but these situations don't automatically preclude the CPA from providing services to both parties. Therefore, the belief that objectivity is not compromised merely by virtue of serving both parties reflects an understanding that proper disclosure, informed consent, and professional diligence play key roles in upholding ethical standards in accounting practice.