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

The most effective safeguard eliminates the source of the threat rather than merely mitigating it; for self-interest threats this typically means removing the financial interest or withdrawing.

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

A familiarity threat arises when close or longstanding personal relationships cause a professional accountant to become too sympathetic to a client's interests and less willing to challenge them.

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

Confidentiality is not absolute; professional accountants must not disclose information without authority but are required to disclose in certain circumstances, such as when required by law or professional standards.

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 self-review threat arises when a professional must critically assess their own prior work, making it difficult to remain objective and to identify and report errors or weaknesses.

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

Section 7 creates a strict liability corporate offence where a commercial organisation is guilty if an associated person bribes another to obtain a business advantage, unless adequate prevention procedures were in place.

ACCA Applied Skills Practice Test

ACCA Applied Skills Practice Test

ACCA AS Ethics and Corporate Governance 3