10. Law and ethics. Flashcards
The five fundamental principles of ethical behaviour: I*, O, PC&DC, C, PB
integrity
The five fundamental principles of ethical behaviour: I, O*, PC&DC, C, PB
objectivity
The five fundamental principles of ethical behaviour: I, O, PC&DC*, C, PB
professional confidence and due care
The five fundamental principles of ethical behaviour: I, O, PC&DC, C*, PB
confidentiality
The five fundamental principles of ethical behaviour: I, O, PC&DC, C, PB*
professional behaviour
Threats to the ethical principles: SI*, SR, F, A, I
self interest
Threats to the ethical principles: SI, SR*, F, A, I
self review
Threats to the ethical principles: SI, SR, F*, A, I
familiarity
Threats to the ethical principles: SI, SR, F, A*, I
advocacy
Threats to the ethical principles: SI, SR, F, A, I*
intimidation
Integrity: S and H in B and PR.
Integrity: straightforward and honest in business and professional relationships.
Objectivity: not allow B, CoI or the IoO to O P or BJ.
Objectivity: not allow bias, conflict of interest or the influence of others to override professional or business judgements.
Professional competence and due care: be aware of all PK necessary to give PS and apply the same D and in accordance with T and PS.
Professional competence and due care: be aware of all prevailing knowledge necessary to give professional service and apply the same diligently and in accordance with technical and professional standards.
Confidentiality: respect the confidentiality of I acquired as a consequence of professional or business engagements and not use the same for PA or that of third parties.
Confidentiality: respect the confidentiality of information acquired as a consequence of professional or business engagements and not use the same for personal advantage or that of third parties.
Professional behaviour: comply with L and R and not to D the profession.
Professional behaviour: comply with laws and regulations and not to discredit the profession.
…: straightforward and honest in business and professional relationships.
integrity
…: not allow bias, conflict of interest or influence of others to override professional or business judgement.
objectivity
…: be aware of all prevailing knowledge necessary to give professional service and apply the same diligently to affairs of the client in accordance with technical and professional standards.
…: respect the confidentiality of information acquired as a consequence of professional or business engagements and not use the same for personal advantage or that of third parties.
confidentiality
…: comply with laws and regulations and not to discredit the profession.
professional behaviour
…: financial interests, loans or guarantees; incentive compensation arrangements; innapropriate use of corporate assets; concern over employment security; commercial pressure from outside the employing organisation.
self interest
…: business decisions or data being subject to review and justification by the same professional accountant in business responsible for making those decisions preparing that data.
self review
…: when furthering the legitimate goals and objecitves of their employing organisations, professional accountants in business may promote the organisation, provided any statements made are neither false nor misleading. Such actions generally would not create an advocacy threat.
advocacy
…: a professional accountant in business in a position to influence financial or non-financial reporting or business decisions having an immediate or close family member who is in a position to benefit from that influence; acceptance of a gift or preferential treatment, unless the value is clearly insignficant.
familiarity
…: threat of dismissal or replacement of the professional accountant in business or a close or immediate family member, over a disagreement about the application of an accounting principle or the way in which financial information is to be reported; a dominant personality attempting to influence the decision making process, for example with regard to the awarding of contracts or the application of an accounting principle.
intimidation
Threats to the fundamental ethical principles are countered with the use of … intended to reduce them to an acceptable level.
safeguards
Threats to the fundamental ethical principles are countered with the use of safeguards intended to reduce them to an …
acceptable level
…: a firm or professional accountant having a financial interest in an assurance client; a firm which has undue dependence on fees from a client or fears losing a significant client; a firm which enters into a contingent fee arrangement with a client; a member of the firm enters into employment negotiations with a client; a firm which develops a significantly close relationship with a client.
self interest
…: a firm designs a financial reporting system and is then asked to issue an assurance report on the effectiveness of the same system; a firm which has prepared the original data used to produce records that are reviewed as part of an assurance engagement; a member of the assurance team has been a director of the client; a member of the assurance team has been employed by the client and is now able to significantly influence the subject matter of the engagement.
self review
…: the firm promotes shares in an audit client; the professional accountant acts as an advocate on behalf of a client in litigation.
advocacy
…: a member of the engagement team having an immediate or close family member who is a director or officer of the assurance client; a member of the engagement team having a close or immediate family member who is employed by the client who is in a position so significantly influence the subject matter of the engagement,
familiarity
…: a firm which is threatened with dismissal by a client; an audit client indicating that it will not award non-assurance related work to the firm if the firm disagrees with the client’s accounting treatment; a firm being threatened with legal action by a client; a firm being pressured to reduce fees; a professional accountant being pressured to agree with a member of the client’s staff due to the employee’s level of expertise on a particular matter.
intimidation
