Skip to content

ACCA Applied Knowledge · Business and Technology · Fundamental principles of ethical behaviour

A finance director threatens to dismiss an accountant unless he agrees to a revenue recognition treatment the accountant believes breaches IFRS. After the threat arises, which action is most appropriate first under the fundamental principles framework?

The accountant should evaluate how significant the intimidation threat is and respond with safeguards or other actions, such as escalating to those charged with governance and documenting concerns. Simply complying, ignoring it, or leaving without any attempt to address it would not satisfy the framework.

  1. AEvaluate the significance of the threat and apply safeguards or other actions, such as escalating to those charged with governanceCorrect
  2. BComply, since the director has seniority and responsibility for the accounts
  3. CResign immediately without documenting or discussing the issue
  4. DIgnore the threat, as threats only matter if the accountant is in public practice

Explanation

The framework requires professionals to identify threats, evaluate their significance and address them by eliminating them, applying safeguards or declining the action. Escalation to governance and documentation is a typical response. Complying would breach integrity and professional behaviour, and threats apply in business as well as practice.

Did you get it right without looking?

One question tells you little. A timed set on Fundamental principles of ethical behaviour shows your real accuracy, how long you take and where you lose marks.

Practise Fundamental principles of ethical behaviourFree diagnostic mock

More Fundamental principles of ethical behaviour questions