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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Laws and regulations

Under the IESBA Code, a professional accountant in public practice becomes aware of suspected NOCLAR at a client. Which factor is the accountant specifically required to consider when determining whether further action is needed in the public interest?

The accountant applies the reasonable and informed third party test: would such a person, weighing the facts and circumstances, likely conclude that the accountant acted appropriately in the public interest. Fee status, personal views about management and competitor behaviour are irrelevant to the decision.

  1. AWhether the client has paid the accountant's fees in full
  2. BThe accountant's personal opinion of the managing director
  3. CWhether a reasonable and informed third party would likely conclude that the accountant has acted appropriately in the public interestCorrect
  4. DWhether the competitor firms would take the same action

Explanation

The Code uses the reasonable and informed third party test when determining whether the accountant has acted appropriately in the public interest. Fees, personal opinions of individuals and competitor behaviour are not relevant factors in that determination.

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