Ella Wong, an HKICPA professional accountant, is the financial manager of PEARNSON Limited, a listed company in Hong Kong. The company specializes in retailing healthcare products.

When Ella Wong prepared PEARNSON Limited’s 2019 financial information (“year 2019”), she received two instructions from the president of PEARNSON Limited:

i. not to depreciate the delivery trucks and office equipment in 2019. The delivery trucks and office equipment were purchased at the beginning of 2019.

ii. include a recent purchase order from a customer in the sales of 2019. The order will only be delivered in January 2020.

Ella Wong carried out these instructions and PEARNSON Limited reported a net income instead of a net loss in 2019.

Requirement:
1.1. In this case, Ella Wong violated three ethical principles, two of which are “objectivity” and “professional behavior”.

Identify and explain the other ethical principle that is violated.
1.2. Explain how Ella Wong violated the “objectivity” by carrying out i. and ii above.

1.3. Propose appropriate actions to Ella Wong.

Answer rating: 100% (QA)

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