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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Code of Ethics for Professional Accountants

Karim, a professional accountant in business at Delta Plc, is pressured by the finance director to present a profit forecast to lenders that omits a known customer default. Karim knows the omission would make the forecast misleading. Which fundamental principle is most directly threatened by the request?

Integrity is most directly threatened. The Code requires accountants to be straightforward and honest and not to be associated with reports containing materially misleading statements or omissions that mislead. Omitting a known customer default from a lender forecast would breach that duty.

  1. AIntegrityCorrect
  2. BConfidentiality
  3. CProfessional behaviour only in respect of advertising
  4. DObjectivity only in respect of familiarity

Explanation

Integrity requires being straightforward and honest, and the Code says accountants must not knowingly be associated with information that is materially false or misleading or omits information so as to mislead. The omission here is a direct integrity issue. Confidentiality concerns disclosure of information, not misleading presentation.

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