ExpertMedium2 marksMultiple Choice
ACCA · Question 26 · Syllabus F: Professional ethics
Section A
EcoCorp's Chief Financial Officer, an ACCA member, is finalizing the annual sustainability report. The CEO asks the CFO to remove a section detailing a recent toxic spill, arguing that it will hurt the stock price and that the spill was 'mostly cleaned up anyway'. If the CFO complies and signs off on the altered report, which IFAC fundamental principle is most directly breached?
Section A
EcoCorp's Chief Financial Officer, an ACCA member, is finalizing the annual sustainability report. The CEO asks the CFO to remove a section detailing a recent toxic spill, arguing that it will hurt the stock price and that the spill was 'mostly cleaned up anyway'. If the CFO complies and signs off on the altered report, which IFAC fundamental principle is most directly breached?
Answer options:
A.
Confidentiality
B.
Professional Competence and Due Care
C.
Integrity
D.
Professional Behaviour
How to approach this question
Recognize that the CFO is being asked to lie by omission. The IFAC code explicitly states that a professional accountant shall not knowingly be associated with reports that omit or obscure information. This is the definition of a breach of Integrity.
Full Answer
C.Integrity✓ Correct
The principle of Integrity imposes an obligation on all professional accountants to be straightforward and honest in all professional and business relationships. Crucially, it states an accountant must not be associated with reports, returns, or communications where they believe the information contains a materially false or misleading statement, or omits/obscures information required to be included.
Common mistakes
Choosing Objectivity. While the CFO's objectivity is threatened by the CEO's pressure, the actual act of signing a misleading report is a direct breach of Integrity.
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