Question $2$

$3$a$.$ 'Integrated reporting advances the proposition that sustainability reporting and financial

reporting are inherently linked and thus would benefit from merging. 'Bob Massie, co$-$founder of

the Global Reporting Initiative

Required: Explain how integrated reporting merges sustainability reporting and financial

reporting.

$(10$ marks$)$

$3$b$.$ Redemption Ltd is a retail trading company in Ghana. Jojo Kwamena $($member of ICAG$)$ is

the finance director and has been in this role for many years. Redemption Ltd has a year$-$end of $30$

June each year. Jojo Kwamena is finalizing the financial statements for the year ended June $30$

On one hand, the warehouse manager of Redemption Ltd has recently advised Jojo Kwamena of

a significant level of slow$-$moving inventory, and that the inventory in question is now more than

seven months old and per the company policy would usually have been written down some months

previously.

On the other hand, the shareholders of Redemption Ltd are trying to sell the company, and the

Chief Executive Officer $($CEO$)$ who happens to be the majority shareholder of Redemption Ltd

has told Jojo Kwamena that it is not necessary to write down the inventory values in the year$-$end

financial statements.

Iojo Kwamena is sure that the CEO wants the financial statements to carry an inflated inventory

valuation because he has found a prospective buyer for the company. The CEO has indicated to

Ioje Kwamena that, if the proposed deal is indeed successful, all employees will keep their jobs

$($including Jojo Kwamena$)$ and the finance director $($Jojo Kwamena$)$ will receive a pay rise. Required: Explain how the finance director could potentially act in order not to breach the

fundamental principles of the IFAC's code of ethics.

$(15$ marks$)$

$($Total $25$ marks$)$