A finance manager is asked by the financial director to delay recording a large invoice received on 30 December until January so that the year-end profit target is met. Which fundamental ethical principle is most directly threatened if the accountant agrees?
Answer and explanation
Correct answer: A. Integrity
- Step 1: The invoice belongs to the year ended 31 December under accruals.
- Step 2: Delaying it knowingly would make the accounts misleading.
- Step 3: Being associated with misleading information breaches integrity, which means being straightforward and honest.
Answer
Integrity.
Why not the others: No confidential information is being disclosed in this scenario. The accountant knows the correct treatment, so lack of knowledge is not the issue. Professional behaviour is a wider principle; integrity is the most direct breach here.
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