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Problem

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question

While performing certain nonaudit services for an insurance company, a professional accountant is asked to recommend the appropriate accounting treatment for a weather hedge transaction. The accountant has worked with financial hedges but has no experience with weather hedges. Which of the following actions by the accountant would be in compliance with the IFAC Code of Ethics for Professional Accountants?

choices

  1. Agree to recommend the appropriate accounting treatment after performing sufficient research on weather hedges.
  2. Refuse to conduct the research and make a recommendation, because of insufficient experience.
  3. Refuse to conduct the research and make a recommendation, because of a conflict of interest.
  4. Agree with the accounting treatment recommended by the company’s hedge fund trader.

subject

professional_accounting

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