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, a practising accountant, breached the body's code of ethics by disclosing confidential client information without authority. Which of the following best describes the role of the professional body in this situation?
The professional body investigates the complaint through its own disciplinary procedures and can sanction the member, for example by reprimand, fine or removal from membership. Enforcing the code of ethics on its members is a core function of a professional accountancy body.
- AIt investigates the complaint under its disciplinary procedures and may impose sanctions on the member, such as a fine, reprimand or withdrawal of membershipCorrect
- BIt refers the matter to the government's criminal courts, because a professional body has no power to discipline its own members
- CIt passes the complaint to the client's external auditor, who must decide whether the member should be sanctioned
Explanation
Professional accountancy bodies set ethical standards for members and enforce them through investigation and disciplinary procedures. Sanctions can include reprimands, fines, and exclusion from membership. The second option is wrong because bodies do have disciplinary powers over members, even though serious criminal matters may also be reported to the authorities. The third option is wrong because the client's auditor has no role in disciplining a member of the body.
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