Which of the following are categories of threats to compliance with one or more of the fundamental principles in ACCAs code of ethics and conduct?

Syllabus F4b)

Identify the main threats to ethical behaviour.

THE MAIN THREATS TO ETHICAL BEHAVIOUR

Paragraph 100.12 of the IFAC Code provides:

“Threats may be created by a broad range of relationships and circumstances. When a relationship or circumstance creates a threat, such a threat could compromise, or could be perceived to compromise, a professional accountant’s compliance with the fundamental principles. A circumstance or relationship may create more than one threat, and a threat may affect compliance with more than one fundamental principle.

Threats fall into one or more of the following categories:

1. Self-interest threat 

   - the threat that a financial or other interest will inappropriately influence the professional accountant’s judgment or behaviour;

2. Self-review threat

   - the threat that a professional accountant will not appropriately evaluate the results of a previous judgment made or service performed by the professional accountant, or by another individual within the professional accountant’s firm or employing organisation, on which the accountant will rely when forming a judgment as part of providing a current service;

3. Advocacy threat

   - the threat that a professional accountant will promote a client’s or employer’s position to the point that the professional accountant’s objectivity is compromised;

4. Familiarity threat

   - the threat that due to a long or close relationship with a client or employer, a professional accountant will be too sympathetic to their interests or too accepting of their work; and

5. Intimidation threat

   - the threat that a professional accountant will be deterred from acting objectively because of actual or perceived pressures, including attempts to exercise undue influence over the professional accountant”

Section A comprises the entire IESBA code, including some augmentations relevant to ACCA registered students, affiliates and members.

The IESBA code contains the following material:

Part 1 – Complying with the Code, Fundamental Principles and Conceptual Framework, which includes the fundamental principles and the conceptual framework and is applicable to all professional accountants.

Part 2 – Professional Accountants in Business, which sets out additional material that applies to professional accountants in business when performing professional activities. Professional accountants in business include professional accountants employed, engaged or contracted in an executive or non-executive capacity in, for example:

• Commerce, industry or service.
• The public sector.
• Education.
• The not-for-profit sector.
• Regulatory or professional bodies.

Part 2 is also applicable to individuals who are professional accountants in public practice when performing professional activities pursuant to their relationship with the firm, whether as a contractor, employee or owner.

Part 3 – Professional Accountants in Public Practice, which sets out additional material that applies to professional accountants in public practice when providing professional services.

International Independence Standards, which sets out additional material that applies to professional accountants in public practice when providing assurance services, as follows:

• Part 4A – Independence for Audit and Review Engagements, which applies when performing audit or review engagements.
• Part 4B – Independence for Assurance Engagements Other than Audit and Review Engagements, which applies when performing assurance engagements that are not audit or review engagements.

Glossary, which contains defined terms (together with additional explanations where appropriate) and described terms which have a specific meaning in certain parts of the Code.

Which of the following are categories of threats to compliance with one or more of the fundamental principles in ACCA's code of ethics and conduct?

What are the ethical threats?

What do you understand by threats to fundamental principles of ethical behaviour?

Are threats to compliance with the Code at an acceptable level?