GBB, while auditing LPL's inventory costs, examined the cost accounting system and found that a large unfavorable labor variance is recorded as assets in 2014 The variance led to material misrepresentation in the financial reports. This bug in the new accounting system is directly responsible for the unfavorable variance calculation. The fundamental principles of integrity (Sec 110) refer to being honest and direct in professional and business dealings (BPP Learning Media, 2012) but Gordon's act constitutes a breach of this principle. Gordon knew the fact but without informing him, discussing it with LPL management, he decides to inform Jane of the general situation. B. Jane informs Gordon that GBB cannot afford to lose a client (auditor since 2012), which will also impact Gordon's profit share. The fundamental principles of objectivity (Sec 120) refer to the obligation of all professionals not to allow bias, conflicts of interest or undue influence of others, as well as not to compromise professional or business judgment. (BPP Learning Media, 2012) This involves violating the ethical principle of objectivity. Jane is also a college friend of LPL's CEO and a good friend ever since