Ch 14: Ethical Issues in Financial Reporting
2. Comprehensive Examples
2-3 Q&A Fortune Limited (ICAP Autumn 2015) [O]
Query: sir kya is baat say koi fraq parta hi jo question main likha hi threats to principle of objectivity and competence i mean k threats to sary principles k liya hain na??
Response: The answer should be as specific as possible. We should be able to identify that which fundamental principle (s) are being affected in a particular situation.
Query: sir kya advocacy threat ni hi ky CA company ki false statements ko promot kr raha hi??
Response: The answer should reflect perspective of CFO (a CA), and not CEO (not a CA) according to the requirements in the question.
2-4 Q&A Ali and Bashir (ICAP Spring 2016) [I]
Query: sir do we have to choose specific breched principles or we can write more of them.....e.g; in this quetion. principle of professional behaviour is also afeected as md is not complying with standards(ifrs) and doing that this which discredit the profession further by doing this he is also not working with due care so principle of profession competence and due care.
Response: This would be too generalised, every situation can be twisted towards discrediting the profession and lack of due care. The answer should be as specific as possible.
2-6 Q&A MNZ Limited (ICAP Spring 2017) [I]
Query: Sir won't there be intimidation threat as well to Atif , since there is pressure from CFO to identify areas where such unlawful adjustments can be made. Sir please make it clear to me.
Response: Although indirectly "intimidation threat" may be assumed. However, it would not be appropriate to assume that every situation where a boss asks for something is "intimidation", like in this example, there is no indication of "afraid", "fear", "pressure", "undue influence" or "dominating personality".
2-7 Q&A Mehran Limited (ICAP Autumn 2017) [R]
Query: There isn't the CEO in breach of "Objectivity" as well as there is a conflict of interest by making Usman process the payment. These get confusing, sir, can you please explain.
Response: The answer in the video clearly stated that: "In the given circumstances, the decision of CEO may also induce lack of *objectivity* due to the expected bonuses to the management."
2-9 Q&A Kiwi Limited (ICAP Autumn 2018) [R]
Query: Sir why familiarity threat is not included, aren't Baqir and Zahoor friends? Is it because the familiarity threat is about "long and close relationships with client or employing organisations " ? Whereas Zahoor is neither client nor an employing organisation.
Response: Yes, exactly this is the reason.
3. Objective Based Q&A