ACCA · Question 52 · Business & Technology
Section B — Multi-Task Question (Syllabus Area F)
Scenario: "TrustAudit" has audited "MegaCorp" for 15 years. The lead audit partner, Sarah, plays golf every weekend with MegaCorp's CEO. During a game, the CEO casually mentions a secret upcoming merger. Sarah later buys shares in the target company. MegaCorp also makes up 40% of TrustAudit's total annual fee income. To address the long tenure issue, TrustAudit decides to replace Sarah with a different lead audit partner next year.
Evaluate the scenario and complete the following 4 tasks:
Task 1: Identify the ethical threat created by Sarah's long-standing friendship with the CEO.
Task 2: Identify the IFAC principle breached when Sarah used the secret merger info to buy shares.
Task 3: Identify the ethical threat created by MegaCorp representing 40% of the firm's fee income.
Task 4: Identify the safeguard TrustAudit applied by replacing Sarah.
Which of the following combinations correctly answers Tasks 1 to 4?
Answer options:
1: Intimidation threat, 2: Integrity, 3: Advocacy threat, 4: Peer review
1: Familiarity threat, 2: Confidentiality, 3: Self-interest threat, 4: Partner rotation
1: Self-review threat, 2: Objectivity, 3: Intimidation threat, 4: Partner rotation
1: Familiarity threat, 2: Professional Competence, 3: Self-interest threat, 4: Resignation
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