ACCA Applied Knowledge · Business and Technology · Fundamental principles of ethical behaviour
Priya, a professional accountant in business, is asked by her finance director to approve a year-end adjustment that she believes would misstate profit. She has raised her concern with the director, who has dismissed it. Following the usual approach to resolving ethical conflicts, which action should Priya take NEXT?
Priya should follow the organisation's internal conflict resolution process, escalating to the next level of management or the audit committee. Direct discussion has failed, and internal escalation respects confidentiality while addressing the concern. Going public is premature, and approving the adjustment would breach her integrity.
- AFollow the internal conflict resolution process, such as raising the matter with the audit committee or the next level of managementCorrect
- BReport the matter immediately to the press to protect the public interest
- CApprove the adjustment, because the director holds greater seniority and carries responsibility for the decision
Explanation
Where a conflict cannot be resolved by discussion with the person involved, the accountant should follow the organisation's formal internal procedures, such as escalating to higher management or those charged with governance. Going to the press is premature and may breach confidentiality. Approving the adjustment would breach the principles of integrity and professional behaviour, and seniority does not remove the accountant's own responsibility.
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