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

An accountant in business discovers that her employer has been deliberately overstating profit. She has raised it internally at every level and nothing has been done. She is considering her options. Which action is most consistent with the fundamental principles?

She should take confidential advice from her professional body and possibly a lawyer, then decide whether disclosure is legally permitted or required, or whether to resign. Press leaks are inappropriate and silence is wrong because confidentiality is not absolute.

  1. ASeek confidential advice from her professional body and consider obtaining legal advice, then decide whether disclosure is permitted or required, or whether to resignCorrect
  2. BImmediately leak the details to the press to protect investors
  3. CRemain silent and continue working because confidentiality is an absolute duty

Explanation

Having exhausted internal routes, the accountant should seek confidential advice from the professional body or a lawyer and consider disclosure where law permits or requires it, and whether to withdraw from the employment. Leaking to the press is unlikely to be appropriate disclosure. Confidentiality is not absolute, because it has exceptions where disclosure is legally required or permitted in the public interest.

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