Introducing
Your new presentation assistant.
Refine, enhance, and tailor your content, source relevant images, and edit visuals quicker than ever before.
Trending searches
IFAC Code of Ethics, Threats, Safeguards & Case Studies
40
IFAC Code of Ethics
In Public Practice
(1) Integrity
(2) Objectivity
(3) Professional Competence and Due Care
(4) Confidentiality
(5) Professional Behavior
111-Integrity
# to be straightforward and honest in all professional and business relationship.
#Integrity implies fair dealings and truthfulness
Shall not associated with:
Integrity
*misleading statement *provided information recklessly *omits required information
112- Objectivity
# not to compromise professional judgment because of bias, conflict of interest or undue influence
Objectivity
# shall not undertake a professional activity if the circumstance unduly influences the accountant"s professional judgment
113-Professional Competence and Due Care
# maintain professional knowledge
# exercise of sound judgement
# have appropriate training and supervision
Professional Competence and Due Care
# make clients, aware of the limitation inherent in the services
114-Confidentiality
Be alert to the possibilities of inadvertent disclosure including:
Confidentiality
*family member *firm *prospective client *personal or 3rd party advantage *employee organization *respect the duty of confidentiality
Disclose
Disclose
# when required by law #right to disclose when not prohibited by law #inquiry by professional body #to protect professional interest
115-Professional Behavior
# comply with relevant laws and regulation # avoid any conduct that discredit the profession # shall not make exaggerated claim for marketing activities
Professional behavior
Identifying Threats:
Self interest
Self-review
Intimidation
Familiarity
Advocacy
In Business
Topic
(a) Self-interest Threats:
➢ A professional accountant having a direct financial interest in a client.
➢ A professional accountant quoting a low fee to obtain a new engagement and the fee is so low that it might be difficult to perform the professional service in accordance with applicable technical and professional standards for that price.
➢ A professional accountant having a close business relationship with a client.
➢ A professional accountant having access to confidential information that might be used for personal gain.
➢ A professional accountant discovering a significant error when evaluating the results of a previous professional service performed by a member of the accountant’s firm
(b) Self-review Threats
➢ A professional accountant issuing an assurance report on the effectiveness of the operation of financial systems after implementing the systems.
➢ A professional accountant having prepared the original data used to generate records that are the subject matter of the assurance engagement.
Topic
(c) Advocacy Threats
➢ A professional accountant promoting the interests of, or shares in, a client.
➢ A professional accountant acting as an advocate on behalf of a client in litigation or disputes with third parties.
➢ A professional accountant lobbying in favor of legislation on behalf of a client.
Topic
(e) Intimidation Threats
➢ A professional accountant being threatened with dismissal from a client engagement or the firm because of
a disagreement about a professional matter.
➢ A professional accountant feeling pressured to agree with the judgment of a client because the client has
more expertise on the matter in question.
➢ A professional accountant being informed that a planned promotion will not occur unless the accountant agrees with an inappropriate accounting treatment.
➢ A professional accountant having accepted a significant gift from a client and being threatened that acceptance of this gift will be made public.
Topic
(d) Familiarity Threats
➢ A professional accountant having a close or immediate family member who is a director or officer of the client.
➢ A director or officer of the client, or an employee in a position to exert significant influence over the subject matter of the engagement, having recently served as the engagement partner.
➢ An audit team member having a long association with the audit client.
Topic
INDUCEMENTS, INCLUDING GIFTS AND HOSPITALITY
● Gifts.
● Hospitality.
● Entertainment.
● Political or charitable donations.
● Appeals to friendship and loyalty.
● Employment or other commercial opportunities.
● Preferential treatment, rights or privileges
Gift
Safeguards
Identifying Threats
Self-interest
Self-review
Advocacy
Fundamental Principles
Familiarity
Intimidation
Self-interest Threats
A professional accountant having a direct financial
interest in a client.
● A professional accountant quoting a low fee to obtain a
new engagement and the fee is so low that it might be
difficult to perform the professional service in accordance
with applicable technical and professional standards for
that price.
● A professional accountant having a close business
relationship with a client.
● A professional accountant having access to confidential
information that might be used for personal gain.
● A professional accountant discovering a significant error
when evaluating the results of a previous professional
service performed by a member of the accountant’s firm.
Self-review Threats
● A professional accountant issuing an assurance report on the effectiveness of the operation of financial systems
after implementing the systems.
● A professional accountant having prepared the original data used to generate records that are the subject matter of the assurance engagement.
Advocacy Threats
● A professional accountant promoting the interests of, or shares in, a client.
● A professional accountant acting as an advocate on behalf of a client in litigation or disputes with third parties.
● A professional accountant lobbying in favor of legislation on behalf of a client.
Familiarity Threats
● A professional accountant having a close or immediate family member who is a director or officer of the client.
● A director or officer of the client, or an employee in a
position to exert significant influence over the subject
matter of the engagement, having recently served as the engagement partner.
● An audit team member having a long association with the audit client.
Topic
Intimidation Threats
● A professional accountant being threatened with
dismissal from a client engagement or the firm because of a disagreement about a professional matter.
● A professional accountant feeling pressured to agree
with the judgment of a client because the client has more expertise on the matter in question.
● A professional accountant being informed that a planned promotion will not occur unless the accountant agrees with an inappropriate accounting treatment.
● A professional accountant having accepted a significant gift from a client and being threatened that acceptance of this gift will be made public.