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

Lena is a professional accountant in business whose employer asks her to prepare group financial statements that omit a material related party disclosure required by IAS 24. Internal escalation to the board has failed. Which statement about her position is correct?

Lena should consider whether she can remain with the employer, because an unresolved pressure to omit a required disclosure is a threat to integrity that may not be reducible to an acceptable level. Following instructions to mislead breaches her ethical duties, and merely informing the board does not end them.

  1. AHer duty of confidentiality means she must never disclose anything outside the entity
  2. BHer duty is to the employer only, so she should prepare the statements as instructed
  3. CShe should consider whether to remain with the employer, as the threat to integrity may be one she cannot eliminate or reduce to an acceptable levelCorrect
  4. DShe is released from all ethical obligations once she has told the board

Explanation

If the conflict remains unresolved after internal steps, the accountant should consider the implications of continuing, including resigning, and whether disclosure is required or permitted. Preparing misleading statements breaches integrity and professional behaviour. Confidentiality is not an absolute bar, and informing the board does not discharge her duties.

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