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ACCA Strategic Professional · Strategic Business Leader · Professionalism, ethical codes and the public interest

Marcus is the ACCA-qualified financial controller of Orion Logistics. His brother-in-law owns the company that has just been shortlisted to supply fleet maintenance, and Marcus has been asked to score the tenders. Which threat to compliance with the fundamental principles does this most clearly present, and what is the most appropriate response?

This is a familiarity threat to objectivity arising from the close family relationship. Marcus should disclose it and withdraw from scoring that tender, or the process, so that the evaluation is not influenced by his relationship with the supplier's owner.

  1. AIntimidation threat; he should report the brother-in-law to the regulator
  2. BSelf-review threat; he should ask internal audit to re-perform his scoring
  3. CFamiliarity threat; he should disclose the relationship and withdraw from scoring that tender, or from the processCorrect
  4. DAdvocacy threat; he should score the tender but note the relationship in his working papers

Explanation

A close family relationship creates a familiarity (or self-interest) threat to objectivity because he may be too sympathetic to the supplier. The appropriate safeguard is to disclose the relationship and remove himself from the evaluation. Merely noting the relationship does not eliminate the threat, so the advocacy option is wrong.

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