ACCA Strategic Professional · Advanced Audit and Assurance (International) · Advertising, tendering, and obtaining professional work and fees
Harlow & Co, an audit firm, plans a brochure promoting its services to prospective clients. Under the IESBA Code, which statement about the content of the brochure is correct?
Promotional material must be honest and truthful, avoid exaggerated claims or unrealistic expectations, and must not disparage other firms. Unsupported claims of being best and comparisons that belittle competitors breach the IESBA Code's integrity and professional behaviour requirements. Pre-approval by a regulator is not required.
- AIt may state that Harlow & Co is the best audit firm in the region, provided the claim is not challenged
- BIt must be truthful and not create unrealistic expectations or make disparaging references to other firmsCorrect
- CIt may compare the firm's fees with named competitors to show it is cheaper
- DIt may include only statements approved in advance by the regulator
Explanation
The Code requires professional accountants in marketing to be honest and not bring the profession into disrepute. Promotional material must not make exaggerated claims about services or qualifications, nor make disparaging comparisons with other firms' work. Unsupported 'best firm' claims and named comparisons breach this. The Code does not require regulator pre-approval.
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