CIMA Exam CIMAPRO19-P03-1 Topic 2 Question 63 Discussion

Actual exam question for CIMA's CIMAPRO19-P03-1 exam

Question #: 63
Topic #: 2

You are a member of the Chartered Institute of Management Accountants (CIMA) and you have recently taken up the position of Sales Manager with a company that is facing financial difficulties.The company's termsinclude a commitment to maintainspecifiedprofitability, liquidity and solvency measures; failure to dosowould renderbankloans immediately repayable. The draft financial statements show that the company has not succeeded in complying with all of these requirements.

The financial results are very dependent on various estimates such as receivables impairments.The Chief Executive Officer (CEO) has suggested that these be recalculated so as tobring the financial results within the requirements of the bank. He has asked you to sign pre-dated internal documentation which would imply that, asSales Manager,you initiated these changes in the belief that they would enhance the accuracy of the Financial Statements.

WhichTWOof the following courses of action available to you would be ethically acceptable according to the CIMA Code of Ethics?

ARefuse to sign the documentation on the grounds that you did not initiate this action, and to give the impression that you did would be unethical.

BAgree to sign the documentation on the grounds that these matters are highly subjective anyway and the proposed changes are, at least, plausible.

CRefuse to actually sign the documentation but make clear to the CEO that youwill raise no objection if he amends the Financial Statements asif you had signed.

DSeek legal advice on the matter because you feel you are being placed in a very difficult position.

Show Suggested Answer

Suggested Answer: B, C, E

by Lavera at Mar 19, 2024, 04:50 PM

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Ty

29 days ago

I see the CEO's trying to pull a good old 'creative accounting' trick here. Quick, someone get the Enron team on the line - they're the experts in this kind of financial gymnastics!

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Kelvin

1 months ago

Nope, nope, nope. I ain't putting my name on anything that's not 100% legit. I'd rather take a stand and risk the wrath of the CEO than compromise my integrity. Where's the 'Grow a spine' option on this question?

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Avery

8 days ago

A) Refuse to sign the documentation on the grounds that you did not initiate this action, and to give the impression that you did would be unethical.

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Moon

1 months ago

Well, if the changes are at least plausible, maybe it's not the end of the world. But I don't know, man, it still feels kinda shady. I'd probably just keep my head down and let the CEO handle it.

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2 months ago

I'm not comfortable signing those pre-dated documents. That would be misleading and goes against the CIMA Code of Ethics. I'd rather stand my ground and refuse to participate in this dubious activity.

upvoted 0 times