articlea Flashcards
Threats to ethical behavior
Self-interest: Letting personal or organizational interests affect judgment.
Familiarity: Being too biased towards a close client or employer.
Intimidation: Allowing external pressures to compromise objectivity.
Self-review: Failing to properly assess past judgments during current services.
Advocacy: Over-promoting a client’s or employer’s position, risking objectivity
IT security is imp for accountant because
- Accountant as custodian of sensitive data faces IT security risks
- Threats from hackers may compromise objectivity and lead to data misuse or destruction
- Ethical duty of confidentiality, especially regarding customer or employee data, is at risk
- Accountants must identify valuable information, implement controls, and comply with data regulations
- Failure to address regulations may lead to accusations of lacking integrity, competence, and due care
- Ethical awareness is crucial during security breaches
- Consideration of public disclosure may be necessary to protect the public interest
AI ethical issues
may be used maliciously.
risks of bias in the system in unexpected and potentially detrimental ways.
threat to certain categories of employment.
risk of technical safety and failure
how to address an ethical issue
- Determine the nature of the decision by understanding the context of the ethical dilemma.
- Identify whose rights and interests are affected by the decision.
- Consider rules of professional practice, internal and external governance codes, and relevant laws.
- Set out arguments for and against a specific course of action.
- Formulate a solution that does justice to the arguments presented.
- Take into account any negative consequences of taking or not taking the action.
why is clutter in FS a problem
-lenghty
-primary FS are preceded by lengthy reports
-sheer volume can hinder users from finding relevant info
-length is not a problem it should be well organised, so users can easily find what is imp for them and ignore rest.
what amendments have been made to IAS to reduce clutter
companies are now required to systematically order their disclosure notes. This means:
- giving prominence to the most relevant activities
- grouping items that are measured in the same way, such as at fair value, or
- following the order of line items in the statement of profit or loss, and statement of financial position.
IASB has also given guidance on how to make materiality judgements
why are companienies producing so much disclosures
-so many different laws and standards to follow
-threat of critisicm, so safe option
-they are just following a checklist, and not assessing whether the dislcosure really needs to be made
-pressures of time and cost so they use easy option, copy old reports
-Materiality should be the driving force of disclosure, and reporting entities do not need to provide a disclosure specified by an IFRS Accounting Standard if the information is not material.
What is the four-step materiality process recommended in IFRS Practice Statement 2?
1) Identify information that might be material
2) Assess whether the information from step 1 is material
3) Organise the information so that it is clear and concise
4) Review the draft financial statements
-consider both qualitative and quantitative info
-consider impact on primary users aka investors, lenders
future developments
The International Sustainability Standards Board is finalizing requirements for entities to disclose sustainability-related financial information, including climate-related risks and opportunities, responding to user demands for better quality information.
What is the key balance needed in financial reporting according to the conclusion of the article?
It is important to avoid unnecessary information in annual reports, but it is equally important to present useful information coherently, maintaining a balance to ensure users can understand the entity’s financial performance, business model, and associated risks and opportunities.
what is a disposal group
group of assets disposed off in a single transaction (sub)
lease early termination penalty treatment
means lease term has changed . lease must be remeasured and now include PV of penalty (exclude any payments after this date)
when lease liability is remeasured, ROU should also be adjusted. if ROU has been written down to zero expense should be charged in PnL.
FS errors, ethical issue
-fs error is ethical issue even if genuine error
-accountant has a duty to prepare fair, transparent, complying fs so primary group users arent misled
for accounting issue:
accountant has made mistakes whiich are not expected from a professionally qualified accountant.
accountant doesnt know ___ issue
acca’s ethical pricniples are integrity, professional competnce, professionalism, objectivity, confidentiality
a floq of eco benefits must be probable before element is recognised, but ifrs dont apply this rule themselves
