General Management · Professional Ethics
You are a Chartered Accountant at a reputed firm. A client requests your assistance in revising inventory valuation figures for the quarterly financial statement, aiming to reflect higher profitability. The adjustment is not in direct violation of accounting standards but stretches professional judgment and could mislead stakeholders about the company's financial health. The client assures you that this is a 'temporary measure' and promises to provide accurate figures by year-end. As a Chartered Accountant, considering ethical expectations, stakeholder interests, and professional standards, what should be your immediate course of action?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Delay action and ask for written confirmation of the client's instructions.
- 2Report the client's intent to relevant regulatory authorities without client consultation.
- 3Politely decline the request and advise the client on ethical accounting practices.✓
- 4Approve the client's request and adjust the inventory valuation as instructed.
Correct answer
Politely decline the request and advise the client on ethical accounting practices.
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