American Institute of Certified Public Accountants (AICPA) Practice Exam

Under what condition would a member in business not violate the Integrity and Objectivity Rule when directed to record misleading entries?

1. If they follow orders from their supervisor.

2. If they are unaware the entries are misleading.

3. If they document their concerns.

4. If they resign from their position immediately.

The correct answer is: If they are unaware the entries are misleading.

Choosing to record misleading entries without awareness of their misleading nature aligns with maintaining integrity and objectivity. If a member in business genuinely does not know that the entries they are directed to record are misleading, they are not intentionally acting in violation of ethical standards. The Integrity and Objectivity Rule emphasizes the necessity for professionals to act honestly and remain free from conflicts of interest in their professional responsibilities. In this scenario, as long as the individual has no awareness or intention of wrongdoing, they do not compromise their integrity or objectivity. The other options involve differing degrees of awareness and action that could impact a member's ethical standing. Following orders without awareness does not inherently absolve responsibility; the same can be said for documenting concerns or resigning. Documentation might be a step towards addressing the issue but does not negate the potential violation if the member is aware of the misleading nature of the entries. Resigning does not change past actions or intentions and may not be a feasible or practical option in every situation. Thus, the condition of being unaware of misleading entries best aligns with the stipulations of integrity and objectivity.