Reference no: EM132584058

You are the financial controller of Gamma Holdings PLC that engaged in import and distribution of home electronic appliances. Group marketing manager informed you that a sales order worth Rs.25 million has been cancelled and returned by one of Gamma Holding's major clients at the year end. He further requests that you should not reverse the sales return in the books of accounts as such reversals would adversely affect the annual bonus of their marketing team as well as the other executive employees including yourself. He further stresses that the Group CEO also is of the view that you should not reverse this sales return during the current period as it would adversely affect to the financial performance of the company for the year ended 31 March 2020. However, according to your judgement such a sales return should be adjusted in the current financial statements in order to provide a true and fair view of the financial result and position of the company. As a member of a professional accounting body you are highly concerned about this issue as it would amount to non-compliance with fundamental ethical principles.

Required

Question a. Briefly explain five fundamental ethical principles that a professional accountant in a business is required to complied with.

Question b. With respect to your position as a financial controller at Gamma PLC, identify fundamental ethical principles under threaten, types of threats to your compliance with the ethical principles, and discuss as to what safeguards you could follow to minimize those threat