Tag: Ethical Guidance

Part A of the ICAEW Code of Ethics establishes the fundamental principles of professional ethics for professional accountants and provides a conceptual framework for applying those principles.

Which ONE of the following are stated as fundamental principles in the ICAEW Code of Ethics?

Select ONE answer:

1. Independence
2. Persuasiveness
3. Confidentiality
4. Reliability

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct == > The fundamental principles established by the ICAEW Code of Ethics are integrity, objectivity, professional competence and due care, confidentiality and professional behaviour.
4. Not correct

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Staffie plc employs directors of finance, human resources and legal services, as well as a company secretary.

The company is having operational problems which are delaying its completion of a key industrial project.

If the project misses its deadline Staffie plc may suffer heavy penalties under the terms of its sales contract with the ultimate end customer.

Part of the delay has been caused by strikes due to bad industrial relations with both Staffie’s own employees and the sub-contractors, but Staffie plc is unsure whether the penalties included in the contract will come into effect given this primary reason.

Identifying whether the penalties are likely to come into effect is the role of Staffie plc’s?

Select ONE answer:

1. Director of finance
2. Director of human resources
3. Director of legal services
4. Company secretary

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct == > Enforcement of contracts is clearly a legal matter requiring the attention of the company’s director of legal services.
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Betty is a professional accountant in public practice, working for Bash and Co.

She has just got engaged to the managing director, Keith, of Bobbies Ltd, where she used to work until about a year ago.

Betty started working on the company’s audit six months ago.

The following statements about this situation have been made:

Statement 1 An objective attitude towards a client is subject to self-interest or familiarity threats as a consequence of family or other close personal or business relationships.

Statement 2 Where a close personal relationship exists between a professional accountant and someone in a client organisation, that person can continue to act for the company providing sufficient safeguards are in place.

Statement 3 A professional accountant should not personally take part in a company audit if they have worked for that company within two years of the period of the audit.

Identify whether the statements are true or false?

Select ONE answer:

1. Statement 1. True and Statement 2. False and Statement 3. False
2. Statement 1. False and Statement 2. True and Statement 3. False
3. Statement 1. True and Statement 2. False and Statement 3. True
4. Statement 1. False and Statement 2. True and Statement 3. True

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct == > True False True
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

The professional accountant should always be aware that there are certain accounting principles that underlie accounting, financial reporting and assurance.

The following statements about specific accounting principles were made by a consultant:

Statement 1: It is assumed that the company will continue on long enough to carry out its objectives and commitments, so non-current assets are shown at cost less accumulated depreciation.

Statement 2: A very large company’s financial statements have the amounts rounded to the nearest £1,000.

Which accounting principle is at issue in each statement?

Select ONE answer:

1. Statement 1. Prudence and Statement 2. Going concern
2. Statement 1. Materiality and Statement 2. Prudence
3. Statement 1. Going concern and Statement 2. Materiality
4. Statement 1. Going concern and Statement 2. Prudence

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct == > Going concern and Materiality
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.