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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 working as a management accountant is asked by her finance director to leave out a known liability from a report to the bank so that a loan is approved. Which fundamental principle is MOST directly threatened by this request?

Integrity is most directly threatened, because leaving out a known liability would make the report to the bank misleading. Integrity requires members to be straightforward and honest and not be associated with information they know is false or misleading.

  1. AProfessional behaviour only, because the request breaches tax law
  2. BObjectivity only, because the director is a friend
  3. CConfidentiality, because bank information is private
  4. DIntegrity, because the member would be party to misleading informationCorrect

Explanation

Omitting a known liability to mislead the bank means the report would be misleading, so the member would lack straightforward honesty and integrity. Confidentiality is not the issue as the information is being disclosed to the bank with authority. Nothing suggests a friendship, and no tax law is mentioned.

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