ExpertMedium2 marksMultiple Choice
ACCA · Question 30 · Syllabus F: Professional ethics
The lead audit partner for CharityTrust NGO has been managing the audit for the past 12 years. Over time, he has become close friends with the NGO's CEO, frequently playing golf together and attending each other's family weddings.
Which ethical threat is most prominent in this scenario?
The lead audit partner for CharityTrust NGO has been managing the audit for the past 12 years. Over time, he has become close friends with the NGO's CEO, frequently playing golf together and attending each other's family weddings.
Which ethical threat is most prominent in this scenario?
Answer options:
A.
Self-interest threat
B.
Self-review threat
C.
Familiarity threat
D.
Intimidation threat
How to approach this question
Look for keywords like '12 years', 'close friends', and 'family weddings'. These indicate a relationship that is too close.
Full Answer
C.Familiarity threat✓ Correct
A familiarity threat occurs when, due to a long or close relationship with a client, a professional accountant becomes too sympathetic to their interests or too accepting of their work. Audit partner rotation rules exist specifically to prevent this.
Common mistakes
Thinking this is a Self-interest threat because they might want to keep the friendship. The code specifically categorizes close relationships as Familiarity.
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