Fundamental Principles And Threats Flashcards
(14 cards)
What are the 5 fundamental principles?
Integrity Objectivity Confidentiality Professional competence and due care Professional behaviour
Integrity
What does it mean being?
How does it mean dealing?
What does it rule out?
Truthful, honest and straight forward
Fairly with people and situations
Providing false or misleading information
Objectivity
What does it mean not having/being?
What is it closely allied to?
Bias
Independence
Professional competence and due care
What must accountants have?
How must they perform their work?(3)
What must they ensure users of the information produced understand?
Appropriate technical and other skills
Work thoroughly, correctly and on a timely basis
Context and limitations
Confidentiality What must accountancy’s not share? Where should they not share it? What is the only thing that can override this? Name an act.
Information about organisations or people they have encountered in the course of accountancy assignments
Inside or outside the work environment
The pe
Freedom of information act 2000
Professional behaviour
What is this to do with?
What should they not act in?
What are two examples of this?
Complying with standards and laws
A way that might bring the profession into disrepute
Making unwarranted criticisms of a fellow professional
Exaggerating ones abilities or experience
What are threats?
What do safeguards range from?
What does the nature and extent of safeguard depend on?
Motivations that could pressure an individual to override their objectivity, cut corners, mislead or otherwise breach any of the principles.
Protecting individuals entirely from a threat to introducing checks and balances in organisational structures to prevent further threats
Significance of the threat
What are the threats?(5)
Advocacy Familiarity Intimidation Self interest Self review
Self interest
When does this arise?
When an individual or someone close to them have a vested interest in an outcome, over which, they have some degree of influence or control
Self review
When does this arise?
When an accountant is called to check,audit or approve a piece of work that they were involved in originating
Advocacy
What is this a threat to?(2)
When will it mainly effect accountants? Eg
What must you do to act in an advocate role?
What are accountant in business expected to promote?
When does this threat only arise?
What are public servants expected to be in the uk when it comes to politics?
What should they ensure their support of proposals is based on?
What should they not do for a politic party?
Objectivity and independence
Representing a client. Eg in court or for a loan
Adopt a role closely aligned to the client
The interests of their employer
When it leads to making false or misleading statements
Politically neutral
Evidence or objective analysis
Misstate, falsify or deliberately suppress a case
Familiarity What does this arise from? With who can this happen?(4) What does it threaten? What might happen when you have worked with a supplier or buyer long term?
Long term association with an individual
Inside the organisation, with clients, with consumers and with customers
Objectivity
Substitute habit over analysis judgement
Intimidation or undue pressure
What is this described as?
What can it be at its worst?
What is it more likely?(3)
What can happen when directors or senior managers are under pressure?
What is as powerful as actual intimidation?
Disproportionate pressure by someone from a position of power and influence
Threats of violence
Damages to career, loss of contracts, withdrawal of cooperation
Expressed desire can be interpreted as intimidating
Perceived intimidation
Safeguards
What are I_________ safeguards? ( name of the I word)
What are some of the things they include?(3)
What type of environment does this create?(3)
Institutional safeguards
Separation of power, declaration of financial and personal interests, financial regulations
Free from abuse, fraud and disruption
