American Institute of Certified Public Accountants (AICPA) Practice Exam

What is the primary purpose of the Independence Rule for CPAs?

1. To increase compliance costs for firms.

2. To ensure public trust in the services provided.

3. To reduce the workload on auditors.

4. To simplify accounting regulations.

The correct answer is: To ensure public trust in the services provided.

The primary purpose of the Independence Rule for CPAs is to ensure public trust in the services provided. This rule is critical because it establishes the ethical standards that accountants and auditors must adhere to in order to maintain objectivity and impartiality in their work. When CPAs are perceived as independent, it enhances the reliability of their financial reporting and auditing services, which are fundamental to the functioning of capital markets and the overall economy. Public trust is vital as it fosters confidence among stakeholders—including investors, creditors, and the public—in the integrity and accuracy of financial information. Without such trust, the credibility of the entire accounting profession would be undermined, which could lead to a reluctance among entities to share financial data and engage in transactions, ultimately affecting economic stability. While increased compliance costs, workload reduction for auditors, and simplification of accounting regulations may be considerations in the broader accounting environment, these factors do not encapsulate the core aim of the Independence Rule, which is fundamentally centered on maintaining the ethical standards that safeguard public confidence in financial reporting.