Chapter 2 - Threats Flashcards
Self-interest threat
The thread caused by a financial relationship between the accountant and a client or an employer
Self-review threat
The threat caused by an accountant having to review or evaluate a previous judgement that he/she has made
Familiarity threat
The threat caused by a close family relation or close friend of the accountant being a key member of the client staff or a supplier or customer of the accountant’s employer
Intimidation threat
The real or perceived threat caused by a client exerting undue pressure on an accountant in practice or a dominant employer attempting to influence an accountant in business
Advocacy
The threat caused by an accountant going beyond an advisory role and publicly supporting the client in some way
If an accountant has shares in a clients company then they should either:
Sell their shares to remove the conflict of interest or stop acting for that client and give the client to another accountant
What threat is it when you are given a task you are either not qualified or have the time to do?
Self-interest as you wouldn’t want anyone thinking you can’t do it and you would want to prove you can.
What principles does a self-interest threat threaten?
All of them
What principles does a familiarity threat threaten?
All of them
What principles does a intimidation threat threaten?
Objectivity and confidentiality
What principles does a self-review threat threaten?
Objectivity, professional behaviour and professional competence and due care
What principles does a advocacy threat threaten?
Objectivity
