You are one of the three partners in ABC audit firm. Three years ago the firm was appointed as external accountants to a young, successful and fast-growing company, engaged to prepare year end accounts and tax returns. The business had started trading with a handful of employees but now has a workforce of 200, while still remaining below the size of company requiring a statutory audit. Due to your close relationship with the directors of the company (who are its owners) and several of its staff, you become aware that staff purchases of goods manufactured by the company are authorized by production managers, and then processed outside the firms accounting system. The proceeds from these sales are used to fund to conduct the firms Christmas party.

Answer the Questions from 1 to 3

1)Which of the following professional ethics suggests that it is not appropriate to discuss the matter with any of the staff of the client company.

a.

Professional Behavior

b.

Confidentiality

c.

Objectivity

d.

Integrity

2)Who is not an affected party in this particular case?

a.

Directors and staff of the company

b.

Regulatory agencies

c.

You and your firm

d.

Stakeholders of the company

3)Which of the professional ethics helps to protect your reputation and that of your firm and your profession?

a.

Professional Competence

b.

Integrity

c.

Confidentiality

d.

Professional Behavior