ACCA Paper P1 Governance, Risk and Ethics June 2011
Final Assessment – Answers
To gain maximum benefit, do not refer to these answers until you have completed the final assessment questions and submitted them for marking.
ACCA P1 : GOVERNANCE, RISK AND ETHICS
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FINAL ASSESSMENT ANSWERS
Key answer tips (a) (b) This requirement has two parts, to discuss both the responsibilities for an employee and as accountant. The definition of ‘reputation risk’ used to this answer, was taken from the examiners definition used in the 2007 pilot paper. When asked to Evaluate remember to discuss both the positives and negatives. This requirement asked you to describe ‘sound’ this should indicate the three features of a sound system of internal control described in the Turnbull guidance. It is important for this requirement that you ensure your tone and language is appropriate for a Chairman to use in speaking to the shareholders of M & A Consulting. Ethical responsibilities of a professional accountant A professional accountant has two ‘directions’ of responsibility: one to his or her employer and another to the highest standards of professionalism. Responsibilities to employer An accountant’s responsibilities to his or her employer extend to acting with diligence, probity and with the highest standards of care in all situations. In addition, however, an employer might reasonably expect the accountant to observe employee confidentiality as far as possible. In most situations, this will extend to absolute discretion of all sensitive matters both during and after the period of employment. This point is likely to be particularly relevant in the government / public sector work that M & A Consulting undertakes, since any information could have a political impact and would certainly be of interest to the media. The responsibilities also include the expectation that the accountant will act in shareholders’ interests as far as possible and that he or she will show loyalty within the bounds of legal and ethical good practice. There would be an expectation that an employee would not make public failings of internal controls of a company, since this may lead to loss of future business. Responsibilities as a professional In addition to an accountant’s responsibilities to his or her employer, there is a further set of expectations arising from his or her membership of the accounting profession. At times these responsibilities may conflict with those as an employee, as may be seen in the situation that Marjorie Basil faced at M & A Consulting. In the first instance, professional accountants are expected to observe the letter and spirit of the law in detail and of professional ethical codes where applicable (depending on country of residence, qualifying body, etc.).
ACCA P1 : GOVERNANCE, RISK AND ETHICS
In any professional or ethical situation where codes do not clearly apply, a professional accountant should...
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