1.15 Chester is the financial controller of Barnes Wallis plc. He reports to the finance director, Amy. It is shortly after the year-end of Barnes Wallis plc, and Chester is in the process of completing the company’s annual financial statements. The draft financial statements show a profit of £1.3 million.

In a meeting with Amy, she explains to Chester that the final profit figure must be at least £1.5 million in order to meet the business’s targets for the year. She asks Chester to alter the financial statements so that they will show a profit of more than £1.5 million. She tells him that if he does this, she will recommend him for a pay rise at his annual salary and performance review. Chester and Amy are both chartered accountants.
Identify the threats in this scenario to the fundamental ethical principles in the IESBA Code of Ethics.
Explain the actions that Chester should take in response to Amy’s request.