Chapter 10 - 2.1 - Threats to Compliance with the Fundamental Principles

Question 1

What are the five threats to compliance with the fundamental principles?

Answer 1

• Self-interest
• Self-review
• Advocacy
• Familiarity
• Intimidation

Question 2

What is the mnemonic to remember the five threats?

Answer 2

F - familiarity
A - advocacy
I - intimidation
R - self-review
S - self-interest

Question 3

Familiarity

Answer 3

A familiarity threat may occur when, because of a close relationship, a member becomes too sympathetic to the interests of a client

Question 4

Advocacy

Answer 4

An advocacy threat may occur when a member promotes a position or opinion to the point that objectivity may be compromised

Question 5

Intimidation

Answer 5

An intimidation threat may occur when a member is deterred from acting objectively by actual or perceived pressures from others

Question 6

Self-review

Answer 6

A self-review threat may occur when a previous judgement needs to be re-evaluated, or reviewed, by the same member responsible for that judgement

Question 7

Self-interest

Answer 7

A self-interest threat may occur as a result of a member’s financial or other interests, or those of an immediate close family member, influencing behaviours and decisions of the member