ExpertMedium2 marksMultiple Choice
ACCA · Question 19 · The Context and Purpose of Financial Reporting
Section A
An accountant working for a public utility company discovers that the company has been illegally dumping toxic waste, which is not disclosed as a contingent liability. The accountant decides to report this to the environmental protection agency.
Which fundamental ethical principle is the accountant prioritizing by making this disclosure?
Section A
An accountant working for a public utility company discovers that the company has been illegally dumping toxic waste, which is not disclosed as a contingent liability. The accountant decides to report this to the environmental protection agency.
Which fundamental ethical principle is the accountant prioritizing by making this disclosure?
Answer options:
A.
Confidentiality
B.
Integrity
C.
Professional competence and due care
D.
Objectivity
How to approach this question
Consider the conflict between confidentiality and the public interest. Reporting illegal acts demonstrates integrity and professional behavior.
Full Answer
B.Integrity✓ Correct
By reporting the illegal dumping, the accountant is acting with integrity. While confidentiality is a fundamental principle, it can be overridden when there is a legal or professional right or duty to disclose, such as protecting the public interest from illegal acts.
Common mistakes
Selecting confidentiality, failing to realize that the scenario describes a justified breach of it.
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