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

A senior accountant at a firm is offered an expensive holiday by a long-standing audit client's finance director shortly before the audit begins. Accepting would most clearly threaten which fundamental principle?

Objectivity is most clearly threatened. A significant gift creates a self-interest or familiarity threat, meaning the accountant's judgement could be, or appear to be, influenced by the client's generosity. Objectivity requires freedom from bias, conflict of interest and undue influence from others.

  1. AObjectivityCorrect
  2. BProfessional behaviour only because of reputational publicity
  3. CConfidentiality

Explanation

Accepting a significant gift from a client creates a self-interest or familiarity threat that could bias professional judgement, so objectivity is the principle most clearly threatened. Confidentiality is about disclosing information, which is not raised by a gift.

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