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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Advertising, tendering, and obtaining professional work and fees

Corvin & Lyle, an audit firm, is invited to tender for the audit of Hartwell Plc. The firm's marketing partner proposes to state in the tender document that the firm is 'the leading audit firm in the sector, far better than any competitor'. Under the IESBA Code, how should this proposal be treated?

The proposal is unacceptable because the claim is exaggerated, unsubstantiated and disparages competitors. The IESBA Code requires marketing to be honest and truthful, avoiding exaggerated claims or unsupported comparisons with other firms, whatever the audience or whether the client consents.

  1. AAcceptable, because tender documents are private and not subject to promotion rules
  2. BAcceptable, provided the claim is approved by the prospective client's board
  3. CUnacceptable, because the statement is not supported by evidence and disparages other firmsCorrect
  4. DUnacceptable, because firms may not describe their services in any tender

Explanation

The Code requires professional accountants not to bring the profession into disrepute and not to make exaggerated claims about services or qualifications, or make disparaging references or unsubstantiated comparisons to the work of others. The claim is unsupported and comparative. Client approval does not cure it, and firms may describe their services truthfully.

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