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

Marlow & Chen, a firm of accountants, is asked by a client's finance director to sign off financial statements in which a large liability has been omitted. The finance director argues that the client is the firm's paying customer and its wishes should come first. Which statement best reflects the accountancy profession's position on the public interest?

The firm must act in the public interest, meaning the collective wellbeing of the community that relies on professional accountants' work, not just the paying client. Fee income or client preference cannot override this duty, so the firm should not sign off statements that omit a significant liability.

  1. AThe firm's primary duty is to the client paying the fee, provided no law is broken
  2. BThe firm should act in the interest of the wider community that relies on its work, not only the client or itselfCorrect
  3. CThe firm's duty is limited to its own partners, since they bear the legal liability
  4. DThe firm should defer to the client's directors because they are responsible for the accounts

Explanation

Professional accountants have a responsibility to act in the public interest, meaning the collective wellbeing of the community that relies on their work (investors, lenders, regulators and others). This duty overrides loyalty to a single client or to personal interest. Option A is wrong because a fee-paying relationship does not outweigh the public interest even where no explicit law is breached.

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