A finance manager discovers that a new cost-cutting plan is fully legal but will mislead customers about the durability of a product. The managing director says: 'If it is legal, it is not our problem.' Which statement best evaluates the managing director's view?

Correct answer: B) It is flawed because legality is a minimum standard and the plan conflicts with the principle of integrity, which requires being straightforward and honest

Explanation

Legal compliance does not make conduct ethical; the law is only a minimum standard. Knowingly being associated with misleading information breaches the principle of integrity, and accountants' ethical duties apply to all their professional activities, not just financial statements. Not every misleading statement is a crime, so the claim that it is automatically an offence overstates the position.