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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

An ACCA member in practice is asked by a long-standing audit client to advise on a software implementation, and later to audit the same system's outputs. A manager says the client's consent removes any issue. Which response is MOST consistent with the ACCA Code of Ethics and Conduct?

The member should evaluate the self-review threat created by auditing a system they helped implement, apply safeguards, and decline one of the engagements if the threat cannot be reduced to an acceptable level. Client consent, separate fees or non-disclosure do not remove the threat to objectivity.

  1. AConsent from the client eliminates any threat, so the member can proceed
  2. BThe member should evaluate the self-review threat and apply safeguards or decline one of the engagements if the threat cannot be reduced to an acceptable levelCorrect
  3. CThe member should proceed because the work falls under different fee agreements
  4. DThe member should proceed but not disclose the dual role to avoid concern

Explanation

Auditing the output of a system the member designed creates a self-review threat. The Code requires evaluating its significance and applying safeguards, or declining or ending an engagement if the threat remains unacceptable. Client consent or separate fee arrangements do not remove the threat, and concealing the dual role would breach integrity.

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