code of ethics Flashcards
what is the IESBA?
international ethics standards board for accountants. independent standards setting body which aims to serve the public interest by setting robust ethics
what are fundamental principles?
principles which accountants are expected to uphold
what are threats to compliance?
major threats that can arise if fundamental principles are not followed
what are safeguards?
methods to reduce risk of threats
state the five fundamental principles from the code of the ethics.
Confidentiality
Objectivity
Professional behaviour
Integrity
Competency
explain “confidentiality” in the fundamental principles.
respect confidentiality of information acquired as a result of professional & business relationships. applies even after rs ends
explain “objectivity” in the fundamental principles.
not allow bias, conflict of interest or undue influence of others to override professional judgements
explain “professional behaviour” in the fundamental principles.
comply with all relevant rules & regulations to avoid discrediting profession. avoid negatively affecting reputation of client, employer or profession
explain “integrity” in the fundamental principles.
straightforward & honest in all relationships. dont use misleading / false info. eg. manipulate or not submit a tax return
explain “competency” in the fundamental principles.
maintain professional knowledge & skill at level required
state the five threats to the fundamental principles.
Familiarity
Advocacy
Intimidation
Self-review
Self-interest
explain the familiarity threat.
when an accountant may become sympathetic or less objective due to a close rs. threatens ability to make unbiased judgements eg. auditing same firm for too long
explain the advocacy threat.
when accountant promotes position or opinion that objectivity may be compromised. eg. political views can interfere with judgement. need value freedom
explain the intimidation threat.
when accountant may be deterred from acting objectively by actual or perceived pressures, to exercise undue influence. eg. senior member encourages accountant to make unethical decisions & intimidates with authority
explain the self-interest threat.
occur as a result of financial or other interests of professional or family member. eg. thinking about yourself & what would be more beneficial to yourself & relations
