Exam pat 1 section 1 Flashcards
conner, a member in practice, has just received a call from a potential new client asking
him to help in a business transaction. However
when asked for her address, the client said
she would rather not say.
Should Connor Continue with forging a relationship with the client in the usual
manner
no
conner, a member in practice, has just received a call from a potential new client asking
him to help in a business transaction. However
when asked for her address, the client said
she would rather not say.
Should Connor, Inform the client that without knowing the correct address the
client/accountant relationship cannot be forged
Yes
conner, a member in practice, has just received a call from a potential new client asking
him to help in a business transaction. However
when asked for her address, the client said
she would rather not say.
Should Connor Consider reporting the conversation to NCA (if so, why)
yes,
to comply with customer due diligence (part of the money laundering regulations) the best course of action for connor to take would be to inform the client he cannot continue the relationship without the address
the reluctance to disclose an address raises concerns over possible money laudering so connor must reort the conversation to the NCA
Jessica, a member in practice, has been tasked to complete an important assignment.
However, she knows that she will not have enough time complete the work properly.
Professional competence and due care
Steve is a professional accountant working in practice.
Kept Ltd is Steve’s oldest client and as well
as the usual accountancy
and tax services, Steve
has recently been asked to write a reference to a new landlord confirming that Kept Ltd is
likely to be able to pay its rent for the next 3 years.
While this would normally not be a problem,
Steve is aware that Kept Ltd has been
experiencing financial difficulties over the last
6 months, so he is wary of writing such a
reference. To reassure him, the Chief accoun
tant has offered to pay Steve a large fee for
supplying the reference and suggested Steve should include a disclaimer of liability
Analyse Steve’s dilemma from an ethical point of view (integrity, Objectivity and professional behavoiur)
Integrity
– Steve must be straightforward and honest in all professional and
business relationships. Integrity also implies fair dealing and truthfulness and
there is a danger that the reference is not a fair or true representation of the
facts as he sees them.
Objectivity
– the large fee should not be allowed to colour Steve’s judgement.
This presents a self-interest threat.
It could also be argued that, because Kept Ltd is Steve’s oldest client, then
there is also a familiarity threat to objectivity.
Professional behaviour
– writing a reference that Steve suspects to be false
could bring discredit to himself and the profession
Steve is a professional accountant working in practice.
Kept Ltd is Steve’s oldest client and as well
as the usual accountancy
and tax services, Steve
has recently been asked to write a reference to a new landlord confirming that Kept Ltd is
likely to be able to pay its rent for the next 3 years.
While this would normally not be a problem,
Steve is aware that Kept Ltd has been
experiencing financial difficulties over the last
6 months, so he is wary of writing such a
reference. To reassure him, the Chief accountant has offered to pay Steve a large fee for
supplying the reference and suggested Steve should include a disclaimer of liability
If Steve writes the reference, knowing Kept Ltd may not be able to pay, what crime
is he potentially committing?
Steve is potentially guilty of ‘fraud by
false representation’ under the Fraud Act 2006.
This is where a person makes ‘any representation as to fact or law … express or
implied’ which they know to be untrue or misleading.
There is also the possibility that the large fee could be interpreted as a bribe under
the Bribery Act 2010 and Steve could be found guilty of passive bribery (receiving a
bribe) under the Act.
There is also the possibility that the large fee could be interpreted as a bribe under
the Bribery Act 2010 and Steve could be found guilty of passive bribery (receiving a
bribe) under the Act.
This is where a person makes ‘any representation as to fact or law … express or
implied’ which they know to be untrue or misleading.
fraud by false representation’ under the Fraud Act 2006.
Steve is a professional accountant working in practice.
Kept Ltd is Steve’s oldest client and as well
as the usual accountancy
and tax services, Steve
has recently been asked to write a reference to a new landlord confirming that Kept Ltd is
likely to be able to pay its rent for the next 3 years.
While this would normally not be a problem,
Steve is aware that Kept Ltd has been
experiencing financial difficulties over the last
6 months, so he is wary of writing such a
reference. To reassure him, the Chief accountant has offered to pay Steve a large fee for
supplying the reference and suggested Steve should include a disclaimer of liability
What difference would it make if Steve included a disclaimer of liability in the
written reference?
It is acceptable practice for Steve to in
clude a disclaimer of liability and it certainly
does no harm to include one. However,
disclaimers can be challenged in court so
may not afford Steve any protection.
If he has serious doubts over whether or not Kept Ltd will be able to pay the rent,
then he shouldn’t write the reference.
Mthbe is a professional accountant with his own small practice. He performs accountancy
and tax services for a wide range of small clients including many sole traders
Explain, with justification, TWO areas in which Mthbe needs to keep his technical
knowledge up-to-date.
(a)
Mthbe needs to keep up-to-date in the following areas (only TWO needed):
tax legislation/compliance
money laundering regulations
accounting/reporting standards
regulation of accounting.
They are important areas because clients are businesses, which must comply
with requirement for accurate accounts preparation and tax returns.
Mthbe needs to ensure he is technically competent to undertake the work
(fundamental principle of professional competence and due care).
Mthbe needs to protect himself re money laundering.
Mthbe is a professional accountant with his own small practice. He performs accountancy
and tax services for a wide range of small clients including many sole traders
According to the AAT CPD policy how often should Mthbe complete a CPD Cyc
The AAT CPD policy asks Mthbe to update his skills twice a year
Mthbe is a professional accountant with his own small practice. He performs accountancy
and tax services for a wide range of small clients including many sole traders
List the recommended stages in the AAT’s CPD cycl
The AAT’s CPD cycle has four stages
– assess, plan, action and evaluation
Sarah is an AAT member working for a small accountancy practice.
She has received a call from a property agen
t asking for the following information about a
client.
- Accounts for the previous three years.
- An assurance that they will be able to meet the rent for a proposed property rental.
Advise Sarah on the appropriate course of action, with regards to giving the agent
the Accounts for the previous three years.
Sarah should obtain authority from the
client to give the financial information
Sarah is an AAT member working for a small accountancy practice.
She has received a call from a property agen
t asking for the following information about a
client.
- Accounts for the previous three years.
- An assurance that they will be able to meet the rent for a proposed property rental.
Advise Sarah on the appropriate course of action, with regards to giving the agent
an assurance the client
will be able to pay.
It is not possible to give an assurance regarding the client ability to pay the re
