ACCA Applied Knowledge · Business and Technology · Fundamental principles of ethical behaviour
An accountant in business is under pressure from the chief executive to present a profit forecast more favourably so that a bank loan is approved. The accountant knows the assumptions are unrealistic. Which response is MOST consistent with the fundamental principles?
She should refuse to be associated with misleading information, explain her concerns, and escalate to those charged with governance if pressure continues. This upholds integrity and professional behaviour. Issuing the forecast with only a private note still allows the bank to be misled, and silent resignation leaves the problem unresolved.
- APresent the forecast as requested but add a private note to the file recording her disagreement
- BRefuse to be associated with misleading information, explain the concerns, and escalate to those charged with governance if the pressure continuesCorrect
- CResign immediately without raising the matter with anyone, to avoid any involvement
Explanation
Integrity and professional behaviour prohibit association with information known to be misleading. The accountant should first challenge and explain, then use internal escalation such as those charged with governance. A private file note still leaves misleading information being issued, and immediate silent resignation avoids addressing the problem and may be premature.
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