ACCA AS Ethics and Corporate Governance 3

Question 1

When a professional accountant faces a self-interest threat to their objectivity, what is generally the most appropriate safeguard?

Accepted Answer

Removing the source of the threat, such as disposing of the financial interest or withdrawing from the engagement

Answer

Accepting the engagement and carefully documenting the threat in the working papers

Answer

Disclosing the self-interest threat to the client and seeking their consent to continue

Answer

Seeking legal advice before deciding how to proceed

Question 2

Which of the following is the best example of a 'familiarity threat' under the IESBA Code of Ethics?

Accepted Answer

An auditor having a long-standing close personal friendship with the client's finance director

Answer

An auditor owning shares in the audit client

Answer

An auditor being offered a substantial gift by the client's management

Answer

An auditor preparing the client's financial statements and then auditing the same statements

Question 3

The fundamental principle of confidentiality for professional accountants means they must:

Accepted Answer

Not disclose confidential information to third parties without proper authority, except where a legal or professional duty exists to do so

Answer

Never disclose any client information under any circumstances whatsoever

Answer

Only share client information with other partners within their own accounting firm

Answer

Keep all engagement information strictly confidential for a minimum of five years

Question 4

Which of the following correctly describes a 'self-review threat' in professional ethics?

Accepted Answer

A professional accountant reviewing and critically evaluating work they previously performed when forming a current opinion or conclusion

Answer

A professional accountant being overly self-critical about their own technical competence

Answer

An accounting firm reviewing the effectiveness of its own internal quality control systems

Answer

A professional accountant auditing a company where they were previously employed as an executive

Question 5

Under the UK Bribery Act 2010, which offence is unique to commercial organisations and has no equivalent individual offence?

Accepted Answer

Failure to prevent bribery by an associated person (section 7)

Answer

Bribing a foreign public official (section 6)

Answer

Offering or paying a bribe (section 1)

Answer

Requesting or receiving a bribe (section 2)

Question 6

The 'public interest' obligation in professional accountancy ethics means that professional accountants must:

Accepted Answer

Accept responsibility to act in a way that benefits society as a whole, not just their employer or individual client

Answer

Always prioritise national government interests over those of private sector clients

Answer

Publish all client financial information to ensure full capital market transparency

Answer

Report all client tax planning arrangements directly to HMRC without client consent

Question 7

Integrated Reporting (<IR>), as promoted by the International Integrated Reporting Council (IIRC), is best described as:

Accepted Answer

A concise communication showing how an organisation's strategy, governance, performance, and prospects create value over the short, medium, and long term across multiple capitals

Answer

Combining financial statements from multiple subsidiaries into a single consolidated group report

Answer

The technical integration of corporate tax reporting with statutory financial reporting under IFRS

Answer

A mandatory ESG disclosure requirement for all FTSE 100 companies under FCA listing rules