Question Tag: Project Reporting

You are a newly qualified accountant in practice, and you lead a team providing management consultancy services. In recent years, your practice has undertaken several assignments on manufacturing efficiency improvements for medium-sized, listed groups of companies in Ghana. One of the Regional Directors has requested an urgent investigation into Project A due to delays and potential cost overruns. After some initial investigation, your team discovers significant issues that could cause a delay of at least three months and additional costs of GH¢7 million to GH¢10 million, not including possible compensation claims.

One week before the final report is due, the Finance Director of the group calls you and asks for an update on Project A’s status. He mentions that the Regional Director informed the Board that the additional costs would only be GH¢4 million to GH¢5 million, with a delay of about six to eight weeks. He asks for confirmation of this information before the upcoming Board meeting, where they will discuss remedial actions for the group’s cash flow.

Required:

i) Discuss the potential ethical issues involved in breaching the fundamental principles of IFAC’s Code of Ethics. (5 marks)
ii) Recommend the possible actions that you should take as a newly admitted member of the Institute of Chartered Accountants, Ghana, in dealing with this ethical dilemma. (5 marks)