Page 159 - F1 - AB Integrated Workbook STUDENT 2018-19

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 When a financial or other Owning shares in a client
interest influences an
accountant’s judgement and
causes a conflict of interest

Self-review When an accountant is required Auditing financial statements that
to re-evaluate their own have been prepared by the audit
previous judgement firm

Familiarity When an accountant becomes Accepting gifts or preferential
sympathetic to the interests of treatment from clients.
others due to a close personal
relationship

Advocacy Can be a problem if an Promoting the client’s shares in a
accountant is promoting a share issue
position or opinion to the point
where their subsequent
objectivity is compromised

Intimidation When an accountant is deterred An accountant is threatened with
from acting objectively by actual dismissal over a disagreement
or perceived threats about application of an
accounting principle

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