Skip to content

ACCA Strategic Professional · Advanced Audit and Assurance (International) · Professional and ethical developments

A firm's whistleblowing channel receives an anonymous report that a senior manager pressured an audit team to accept an unsupported management estimate to retain a major client. Which firm response best supports the public interest and a culture of quality?

The firm should investigate independently of the manager and engagement partner, protect the person reporting, and act if the allegation is substantiated. ISQM 1 requires processes for handling complaints and allegations and a culture that prioritises quality, so ignoring anonymous reports or leaving the accused to judge them is inappropriate.

  1. AInvestigate the allegation independently of the manager and the engagement partner, protect the reporter from retaliation, and take corrective action if substantiatedCorrect
  2. BDisregard it because anonymous reports lack credibility
  3. CAsk the manager to review the report and decide whether it is valid
  4. DWait until the next external inspection before taking any action

Explanation

ISQM 1 requires the firm to establish a culture that recognises quality and to have a process for receiving and investigating complaints and allegations about deficient work or non-compliance. Investigation should be independent of those implicated, and reporters should be protected. Dismissing anonymous reports or letting the accused handle them undermines objectivity and the firm's governance.

Did you get it right without looking?

One question tells you little. A timed set on Professional and ethical developments shows your real accuracy, how long you take and where you lose marks.

Practise Professional and ethical developmentsFree diagnostic mock

More Professional and ethical developments questions