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

An accountant in business is asked by her finance director to alter a forecast to help secure a bank loan. She believes this would be misleading. She has already raised her concern with the finance director, who refused to change his view. What is the most appropriate NEXT step?

She should escalate the issue to the next level of management or those charged with governance, such as the audit committee. Bypassing the organisation and going to the bank breaches confidentiality, and complying would breach integrity, so internal escalation is the proper next step.

  1. ARaise the matter with the next level of management or those charged with governance, such as the audit committeeCorrect
  2. BSend the original forecast directly to the bank without telling anyone
  3. CAlter the forecast as instructed, since the finance director is senior

Explanation

Where the matter is unresolved after discussion with the immediate superior, the accountant should follow the internal escalation route to higher management or those charged with governance. Going directly to the bank would breach confidentiality. Following the instruction would breach integrity and professional behaviour.

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