Question 1

SECTION A - CASE 1: NEUROCLOUD ANALYTICS CO

NeuroCloud Analytics Co is a fast-growing tech startup providing AI-driven data analytics to the healthcare sector. You are an audit manager at Turing & Co, planning the audit for the year ended 31 December 20X5. NeuroCloud is not a public interest entity (PIE).

During the planning phase, you note the following:
1. The projected audit fee from NeuroCloud represents 18% of Turing & Co's total fee income for the year.
2. NeuroCloud has requested Turing & Co to design and implement a new IT system for their financial reporting.
3. NeuroCloud's CEO also acts as the Chairman of the Board.
4. An audit junior overheard confidential discussions about a revolutionary unreleased AI model and subsequently purchased shares in NeuroCloud.

Question:
The audit junior's action of purchasing shares based on unreleased information breaches which fundamental ethical principles?

Accepted Answer

Map the action to the five fundamental principles. Using client data for personal gain = Confidentiality breach. Breaking the law (insider trading) = Professional Behavior breach.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Selecting Integrity and Objectivity as a default answer without analyzing the specific nature of the breach.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA AA — Audit and Assurance Practice Exam 5

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