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Difficulty: MediumEthical Issues and Professional Ethics in Accounting

According to the IFAC and ICAN Codes of Ethics for Professional Accountants, a professional accountant in business is ethically permitted to misstate financial figures if refusing a supervisor's direct order would result in immediate loss of employment.

Answer: Answer

Answer

The statement is False. Threats of dismissal or employer coercion do not exempt a professional accountant from upholding core ethical principles such as integrity and objectivity.
The statement is false because ICAN and IFAC fundamental principles explicitly state that accountants must maintain integrity and objectivity even when facing intimidation threats like termination of employment.

Step-by-Step Solution

1
Identify the ethical issue and threat type described in the stem.
The situation involves an intimidation threat (fear of losing employment) aimed at forcing the accountant to compromise financial integrity.
Understanding the nature of the threat helps determine the appropriate professional conduct required under ethical codes.
2
Evaluate the hierarchy of professional duty versus employer directives.
Professional ethical duties owed by an accountant strictly supersede workplace directives that require illegal or unethical reporting.
The fundamental principles of Integrity and Objectivity require accountants to be honest and free from undue influence, regardless of personal consequences such as job loss.

Key Concept

Intimidation Threat and Professional Integrity in Accounting
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Topics

Ethical Issues and Professional Ethics in Accounting

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