Army Lid is a retail trading company loaded in Survani. Mr. Kaela (member of iCA)is the did tO OFf Mandeund has been in his role for ages. A my Lid has a yearend or 3)June cichyear.Vr.Kadiais Analyzing, he financial statements for the year ended June 3)2019.On one hand the warehouse manager of Army Lid has recently advised Mr. Kaela of asignificant level or slow moving inventory, and that the inventory in question is nowmore than five months old and per the company policy would usually have been writtendown some months previouslyOn the other hand, the owners of Army Lid are trying to sell the company, and the ChiefExecutive Officer (CEO) who happens to be the majority shareholder of Army Ltd hastold Mr. Kaela that it is not necessary to write down the inventory values in the year. endfinancial statements. Mr. Kaela is sure that the CEO wants the financial statements tocarry an inflated inventory valuation because he has found a prospective buyer for thecompany. The CEO has indicated to Mr. Kaela that, if the proposed deal is indeedsuccessful, all employees will keep their jobs (including Mr. Kaela) and the Director ofFinance (Mr. Kaela) will receive a pay rise.
Required:
Explain how Mr. Kaela could potentially act in order not to breach the fundamental principles of the IFAC's code of ethics.