(A) You are a Junior Internal Audit Officer of a regulated entity, and you have conducted an internal audit of some sensitive operations of the entity. The audit covers allowances and bonuses paid or due for payment to the Council Chairperson and other members of the board of governors, including the Managing Director. The transactions and events indicate profligacy and corruption, given the current financial difficulties the entity faces. You took a snapshot of the audit evidence with your phone camera and posted it on your private messaging group to support a claim of corruption you made. This has attracted a lot of traffic to your post, and one of the group members, who is a journalist, decided to spark a bigger debate on the matter in the mainstream media. Your post went viral within 24 hours.
Required:
Discuss the specific ethical principle(s) of professional accountants that has been breached and suggest a safeguard for this scenario. (B)
In early December 2022, your District Council received an unplanned visit from top political figures who claimed to be on a political campaign and decided to pay a “courtesy call” on the District Administrator and the Council. The District Administrator quickly asked that a financial package (brown envelope) be prepared for them. The amount was significant but unbudgeted. The visitors left the Council with high commendation from the District Administrator. Thereafter, he asked the Finance Manager to process the necessary documentation to support the brown envelope transactions. The Finance Manager expressed some misgivings about the transactions but advised the accountant to record the brown envelope transaction as “goods and services” under “travel and transport,” which he did without objection.
Required:
Discuss the specific ethical principle(s) of professional accountants that has been breached and suggest a safeguard for this scenario. (C)
A Finance Manager of a regulated entity has been at his post for the last two years, and it has become an open secret in the entity that he does not know his job. Since his assumption, the entity has not been able to submit the required quarterly and annual public accounts to the Controller and National Auditor. Auditors have raised many audit observations indicting the entity for poor accounting practices. The financial records are in shambles, the financial statements are in disarray, and the cash management is unfortunate. He secured the job based on his political activism rather than accounting professionalism.
Required:
Discuss the specific ethical principle(s) of professional accountants that has been breached and suggest a safeguard for this scenario. (D)
The Finance Manager was touted as the smartest accounting person in Zamara by the Managing Director of the entity. He claims that he always covers for him and delivers him from the corrupt league of public officers. He brags: “This Finance Manager, I have yet to meet his kind of accountant. He understands the language; just discuss it with him, and it is done. Whatever you want. The guy is the smartest of the smart. Even the National Auditor himself can audit him and the report will be clean. I just love this guy because he knows how to cook the books well.”
Required:
Discuss the specific ethical principle(s) of professional accountants that has been breached and suggest a safeguard for this scenario.
