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

Tomas is the group financial controller of Alder Group. The CEO instructs him to defer recognising a large known liability so that a bank covenant is met at year end. Tomas has raised his concern with the CEO, who refused to change the instruction. Following the usual professional approach to resolving ethical conflicts, what should Tomas do next?

Tomas should escalate internally, for instance to the audit committee or non-executive directors, and document everything. Conflict resolution works through internal channels first. Complying would breach integrity, and going straight to the bank would be premature before internal escalation options are exhausted.

  1. AComply, because the CEO carries ultimate responsibility for the accounts
  2. BResign immediately and inform the bank of the problem
  3. CEscalate the matter internally, for example to the audit committee or non-executive directors, and document itCorrect
  4. DChange the figures quietly and keep a private record in case of dispute

Explanation

The usual conflict-resolution sequence is to consult internally first, then escalate through higher levels of management or those charged with governance such as the audit committee, while documenting all steps. Immediate external disclosure is premature, and complying or manipulating figures would breach integrity.

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