Professional Ethics (ICAEW Code) Flashcards
6 cards from real ACA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Professional Ethics (ICAEW Code) flashcards as text
A 'whistleblowing' disclosure by an employee under the Public Interest Disclosure Act 1998 is protected when:
Answer: It relates to a qualifying disclosure made in the public interest through appropriate channels
PIDA 1998 protects workers from detriment when they make qualifying disclosures (e.g., criminal activity, legal obligations, miscarriages of justice) in the public interest through the correct channels (internal, prescribed body, or in exceptional cases to the media).
In the context of professional ethics, which of the following describes a 'conflict of interest'?
Answer: A situation where an accountant's professional obligations conflict with a client's interests or between two clients
A conflict of interest arises where the accountant's interests (or duties to one party) may inappropriately influence their judgement when acting for another, for example acting for two clients with competing interests.
Under the ICAEW Code, the preparation of financial information for a client that the accountant knows to be false would breach which fundamental principle primarily?
Answer: Integrity
Integrity requires professional accountants to be honest and straightforward; knowingly preparing false financial information is a fundamental breach of integrity, regardless of instructions received.
A 'reasonable and informed third party' test in ethics means assessing whether:
Answer: A well-informed, reasonable person aware of all relevant facts would consider the action to be appropriate
The reasonable and informed third party (RITP) test is a key check in the ICAEW Code: would a reasonable person, knowing all relevant facts, conclude that compliance with fundamental principles has been maintained?
Which of the following safeguards can reduce the self-review threat when a firm provides both bookkeeping and audit services to the same non-listed client?
Answer: Using different teams for bookkeeping and audit, with separate quality review
Using separate, independent teams for the non-assurance service and the audit, combined with quality control procedures, reduces the self-review threat to an acceptable level.
Under the ICAEW Code, fee dependency is a concern when fees from a single non-listed client represent more than approximately what percentage of the firm's total fees?
Answer: 25%
The ICAEW Code and ES 4 flag fee dependency as a significant threat when a single client represents a large proportion (around 15% or more for non-listed, or 10% for listed/PIE clients) of total fees; 25% is often cited as the threshold requiring disclosure to ethics partners.