CAF-6 · Chapter 13 · Question 3 of 15
A chartered accountant holds a significant amount of shares in the company where he works as the Finance Director. This scenario most clearly creates which type of threat to his objectivity?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Self-interest threat
Explanation
A self-interest threat arises when a financial or other interest will inappropriately influence a professional accountant's judgment or behavior, such as owning shares whose value depends on the financial statements they prepare.
More Ethical issues in financial reporting MCQs
- Q5Under what circumstance might it be acceptable for a chartered accountant to disclose confidential client/employer information?
- Q6A financial accountant promotes the shares of their employing company to potential investors in a highly exaggerated manner to help the…
- Q7If a chartered accountant in business determines that the financial information they are associated with is materially false or…
- Q8A major supplier offers the Chief Accountant of a company an expensive all-expenses-paid holiday. The accountant is currently negotiating…
- Q9Which principle requires an accountant to maintain professional knowledge and skill at the level required to ensure that clients or…