How to act ethically Flashcards
What are the 5 threats to the principles of ethical behaviour?
Self-interest Self-review Advocacy Familiarity Intimidation
Self-interest
The threat that a financial or other will inappropriately influence an accountant’s behaviour
Self-review
Threat that an accountant will inappropriately evaluate the results of a previous judgement made
Advocacy
Threat that an accountant will promote a client or employers position to the point where objectivity is compromised
Familiarity
Threat that due to close relationship with client, an accountant will be too sympathetic to their interests or too accepting of their work
Intimidation
Threat than accountant will not be objective due to pressure
Give an example of Self-interest
One company makes up large part of income of accountancy firm
Give an example of Self-review
Individual is auditing statements that were prepared by himself
Give an example of advocacy
Accountant involved in selling shares of a client company
Give an example of Familiarity
Accuracy may be compromised if auditor is related to/friend with a director of company
Give an example of Intimidation
May face dismissal etc over the contents of the statements or audit report
