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ACCA Strategic Professional · Strategic Business Reporting (International) · Analysis and interpretation of financial and non-financial information and measurement of performance

Delta Group's finance director proposes to omit from the sustainability report a known, significant supplier pollution incident because it has not yet resulted in fines and the results of the year are already below market expectations. Which response best reflects the professional accountant's ethical position under the IESBA Code fundamental principles?

The accountant should not accept the omission. Leaving out a significant pollution incident to protect results would make the report misleading and breach integrity and objectivity, so the matter should be raised through internal escalation procedures with those charged with governance before considering other action.

  1. AOmission is acceptable because no fine has been recognised under IAS 37
  2. BOmission is acceptable if the incident is disclosed in next year's report
  3. COmission would breach integrity and objectivity if it makes the report misleading, and the accountant should raise the matter through escalation proceduresCorrect
  4. DThe accountant must resign immediately without raising the matter internally

Explanation

The Code requires integrity, meaning not being associated with misleading information, and objectivity, meaning no bias or undue influence. A significant incident omitted to protect results would mislead users, so the accountant should first raise it with those charged with governance. Absence of a recognised fine does not determine whether information is material or misleading. Immediate resignation is not the first step.

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