Skip to content

CA Final · Financial Reporting · Professional and Ethical Duty of a Chartered Accountant

CA Anand Pillai leads a large firm. The managing partner wants to build an ethics-based culture. She is considering four measures: (i) rewarding staff solely on billable hours and revenue targets, (ii) introducing ethics education and training programmes, (iii) adopting a whistle-blowing policy that encourages and protects those who report suspected unethical behaviour, and (iv) implementing policies and procedures designed to prevent noncompliance with laws and regulations. Which set of measures is consistent with the examples of actions in the ICAI Code of Ethics (13th edition)?

The consistent set is ethics training, a whistle-blowing policy and policies to prevent noncompliance. The Code of Ethics lists these as actions promoting an ethical culture, along with performance evaluation and reward criteria that promote ethics. Rewarding only billable hours and revenue targets does not promote an ethical culture.

  1. A(i), (ii) and (iii) only
  2. B(ii), (iii) and (iv) onlyCorrect
  3. C(i) and (iv) only
  4. D(i), (ii), (iii) and (iv)

Explanation

The Code gives ethics education and training, whistle-blowing policies, and policies to prevent noncompliance as examples of actions. It also refers to performance evaluation and reward criteria that promote an ethical culture. Rewarding solely on billable hours and revenue does not promote an ethical culture, so (i) is excluded, leaving (ii), (iii) and (iv).

Did you get it right without looking?

One question tells you little. A timed set on Professional and Ethical Duty of a Chartered Accountant shows your real accuracy, how long you take and where you lose marks.

Practise Professional and Ethical Duty of a Chartered AccountantFree diagnostic mock

More Professional and Ethical Duty of a Chartered Accountant questions