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ACCA Strategic Professional · Strategic Business Reporting (International) · Professional and ethical behaviour in corporate reporting

Kemal is the group accountant of Altan Co. The CEO instructs him to measure a subsidiary's goodwill without impairment testing despite clear indicators of impairment, warning that refusal could cost Kemal his job. Kemal has raised his concern internally without success. Which action is most appropriate next under ACCA's ethical guidance?

Kemal should escalate the matter to those charged with governance such as the audit committee, document it and take advice. Complying would breach integrity, and public disclosure would breach confidentiality. Resignation is a last resort if the matter cannot be resolved.

  1. AComply, since the CEO carries ultimate responsibility for the financial statements
  2. BResign immediately and disclose the matter to the press
  3. CEscalate to those charged with governance, such as the audit committee, and document the matter, considering legal or professional adviceCorrect
  4. DPrepare the impairment calculation privately and keep it unreported to avoid conflict

Explanation

Pressure from the CEO is an intimidation threat. Where internal discussion fails, the accountant should escalate to those charged with governance, keep records and seek advice, and resign only if the matter remains unresolved. Complying breaches integrity, and press disclosure breaches confidentiality without a legal basis.

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