Skip to content

ACCA Applied Knowledge · Business and Technology · Ethical conflicts and dilemmas

An accountant in business has just been offered a large personal loan on unusually generous terms by a major supplier whose invoices she approves for payment. Which fundamental principle is most directly threatened, and what type of threat is this?

The best answer is objectivity threatened by self-interest. A generous loan from a supplier whose invoices she approves creates a financial interest that could bias her judgement. It is not intimidation, because no pressure is applied, and it does not concern her competence.

  1. AObjectivity, threatened by an intimidation threat
  2. BObjectivity, threatened by a self-interest threatCorrect
  3. CProfessional competence and due care, threatened by a familiarity threat

Explanation

The loan gives her a financial interest in keeping the supplier happy, which could bias her approval of its invoices. That is a self-interest threat to objectivity. An intimidation threat would involve pressure or coercion, not a benefit, and there is no issue of competence or of a close relationship (familiarity) here.

Did you get it right without looking?

One question tells you little. A timed set on Ethical conflicts and dilemmas shows your real accuracy, how long you take and where you lose marks.

Practise Ethical conflicts and dilemmasFree diagnostic mock

More Ethical conflicts and dilemmas questions