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ACCA Applied Knowledge · Business and Technology · The role of regulatory and professional bodies in promoting ethical and professional standards in the accountancy profession

A professional accountancy body receives a complaint that one of its members acted dishonestly in preparing a client's tax return. Which action is the body most likely to take in exercising its regulatory role?

The body would investigate through its disciplinary process and sanction the member if the complaint is upheld, for example by reprimand, fine or exclusion. Criminal prosecution belongs to state authorities, and tax penalties are imposed by the tax authority, not the professional body.

  1. AInvestigate the complaint through its disciplinary process and impose a sanction if it is upheldCorrect
  2. BProsecute the member for fraud in the criminal courts itself
  3. CCancel the client's tax filing and notify the tax authority of a penalty
  4. DAsk the member's employer to decide on the outcome

Explanation

Professional bodies operate disciplinary procedures that can lead to sanctions such as reprimand, fine, or withdrawal of membership. They do not run criminal prosecutions, which are for state authorities. They also do not impose tax penalties or delegate their disciplinary role to employers.

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