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

An accountant in business is asked by a close friend, who is a major supplier, to approve a large purchase order without the usual tender process. Which category of threat to the fundamental principles does this situation most directly create?

This is a familiarity threat. The accountant's close friendship with the supplier may make them too sympathetic to the supplier's interests and bypass proper procedures, which risks compromising objectivity in the purchasing decision.

  1. AFamiliarity threatCorrect
  2. BSelf-review threat
  3. CAdvocacy threat
  4. DIntimidation threat

Explanation

A familiarity threat arises when a close relationship makes the accountant too sympathetic to another person's interests. Here the friendship with the supplier may lead to favourable treatment. Self-review concerns evaluating one's own earlier work, which is not present.

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