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Professional ethics in accounting and business
There are several key threats to ethical behaviour that accountants should attempt
to avoid. These include:
Threat Definition Example
Self-interest The auditor is reluctant to take Owning shares in a client
actions that are adverse to the
interests of the audit firm
Self-review The auditor is predisposed to Auditing financial statements that
accept/reluctant to question the have been prepared by the audit
work done by others in the audit firm
firm
Familiarity The auditor is predisposed to An audit team member has a
accept/reluctant to question the close family member working in
work done by the audit client the client accounts department
Advocacy The auditor takes Promoting the client’s shares in a
management’s side, adopting a share issue
position closely aligned with
management
Intimidation The auditor’s conduct is The client threatens the auditor
influenced by fear who is suggesting that a modified
opinion on the financial
statements will be given
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