Appropriate courses of action if a suspicion that an unethical or illegal act has been, or may be, committed: ensure safeguards are in place, evaluate significance of threats, resolve conflicts of interest, seek external/professional help when necessary
When an accountant suspects wrongdoing, they must follow a clear set of steps. These steps protect them, their client, and the public from harm.
Real World
Enron's accountants at Arthur Andersen shredded documents rather than flagging concerns externally — had they sought professional help from regulators, the $74 billion fraud may have been curtailed sooner.
Exam Focus
Always work through the four steps in order; exam mark schemes award a mark per stage, so skipping one costs you.
Essay Framework
Use PEEL to structure every paragraph. Tap each step for guidance and an example.
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