FIA ACCA

146
FAB/F1 ACCOUNTANT IN BUSINESS
24.16 B Rationale: This is a case of intimidation. You may have been tempted to pick self-interest but the
threat of legal proceedings makes this intimidation.
24.17 C Rationale: The fact that the ACCA member does not deal with the client’s affairs is a safeguard
against a conflict of interest.
24.18 A Rationale: The issue for you is confidentiality, as the accounts are likely to contain sensitive
information and should definitely not be left lying around. You may have wondered about
unprofessional behaviour but this would apply to your supervisor rather than you.
24.19 C Rationale: Statement A refers to absolutism and Statement B refers to egoism.
24.20 B Rationale: Statements A and C are criticisms of relativism and Statement D refers to egoism.
25 Section F MTQs
25.1 (a) B, D It is argued that relativism leads to a philosophy of anything goes and the statement that
all statements are relative is an absolute (therefore non-relative) statement.
(b) (i) True Social responsibility costs money and goes against the idea of maximising
shareholder wealth
(ii)
(iii)
False An environmental audit monitors things such as legal compliance with environment
regulations or emissions levels.
False As can be seen in many examples, a number of companies take socially
responsible actions
(iv) True This is an example of a company being socially responsible.
25.2 (a) (i) False This is the deontological view. Teleology is based on consequences.
(ii)
False Bribery involves payment for services that the organisation is not legally entitled to.
(iii) True Virtue ethics suggest managers should incorporate such virtues into their daily
behaviour.
(iv) True This is a key reason why accountants should behave ethically.
(b) A, E Absolutism takes no account of ‘advances’ in morality and if human interpretation leads to
different views there cannot be universal agreement.
25.3 (a) A, C, D, F The professional qualities that an accountant should demonstrate are reliability,
responsibility, courtesy, respect and timeliness.
(b) A, C The fundamental principles are integrity, confidentiality, objectivity, professional behaviour
and professional competence and due care
25.4 (a) (i) B YRT Co is threatening its independence by taking the client’s position in the legal
case.
(ii) A Since the audit partner has a long-term relationship with the audit client, there is a
familiarity threat.
(iii) D A self-interest threat exists if there are close personal relationships between the
client and the audit team.
(iv) C Where the external auditor helps to prepare the financial statements there is a clear
self-review threat
(b) A Litigation gives rise to a threat of intimidation. The others give rise to self-interest threats.
(c) B Ethics are a moral rather than legal or regulatory issue, although professional ethics are
particularly important.
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