ICAEW CFAB Bridging - Ethics

three of the following are fundamental principles of the IESBA Code of Ethics for Professional Accountants?

• Integrity

• Objectivity

• Independence

• Confidentiality

• Courtesy

Which of the following statements is correct?

• The ICAEW Code of Ethics applies to its members only.

• The ICAEW Code of Ethics applies to its members and employees of member firms only.

• The ICAEW Code of Ethics applies to its members, employees of member firms and ICAEW students.

• The ICAEW Code of Ethics applies to its members, employees of member firms, ICAEW students and all other members of UK accountancy bodies.

Which of the following statements best describes ethical guidance in the UK?

• Ethical guidance provides a set of rules which must be followed in all circumstances.

• Ethical guidance is a framework containing a combination of rules and principles, the application of which is dependent on the professional judgement of the accountant based on the specific circumstances.

• Ethical guidance provides a set of principles which can be applied at the discretion of the

  accountant.

• Ethical guidance is a series of legal requirements.

There are two main approaches to a code of professional ethics: a rules-based ethical code and a code based upon a set of principles.

Indicate whether the following statements are true or false.

Requirements

A code based upon a set of principles requires a professional accountant to comply with a set of specific rules.

A True

B False

A rules-based code requires a professional accountant to identify, evaluate and address threats to compliance with fundamental ethical principles.

C True

D False

• A - True

• B - False

• C - True

• D - False

Which of the following is a consideration in the application of ICAEW's Code of Ethics?

• Whether or not the activity is remunerated

• That the client or employer is an ICAEW member, student, affiliate or member firm

• If an action brings discredit to the profession

• Whether or not the activity is an accounting or assurance engagement

Emma, a chartered accountant, discovers that a colleague has deliberately misstated figures in a financial report to impress stakeholders. The company asks her to approve the report without correction.

What should Emma do to uphold the principle of Integrity?

• Approve the report quietly to maintain team harmony

• Ignore the issue but avoid signing the report

• Report the misstatement and refuse to sign the report

• Sign the report under protest

Liam is auditing a company where his close friend is the CFO. The CFO asks him to overlook some questionable transactions.

What should Liam do to maintain Objectivity?

• Continue the audit but remain cautious

• Inform his firm and remove himself from the engagement

• Proceed since he believes he won’t be influenced

• Just disclose the relationship in the report

Carlos is reviewing a client's records and finds evidence of a potential merger. A friend, who is a stock trader, asks for insider tips.

What should Carlos do?

• Share the information with his friend in confidence

• Leak the information anonymously

• Refuse to disclose anything

• Hint at the news subtly

Julia criticizes a competitor’s audit work publicly on social media, using harsh and sarcastic language, suggesting they are incompetent.

What principle has Julia likely violated?

• Confidentiality

• Integrity

• Professional Behavior

• Objectivity

A client asks Ravi to urgently file their accounts. Ravi rushes through the work, skipping a few checks to meet the deadline.

Which principle has Ravi breached?

• Integrity

• Confidentiality

• Professional Competence and Due Care

• Professional Behavior