the introduction of organisational ethics policies and procedures; the development of training for all employees to ensure their compliance; a culture that encourages employees to communicate to senior levels about ethical issues without fear of retribution. |�S����dȶ���ߍ0�mv �}��ÌcirK�R�>�tF����"� First, there are the safeguards created by laws and regulations in your country and by your own accounting profession. Is this my problem, or does it belong to someone else? Question 4c - December 2015. complying with continuing professional development requirements; keeping records of contentious issues and how they were addressed; using the services of legal advisors and your professional body. 4. ACCA rules state that recurring fees paid by one client or a related group of clients should not exceed 15% of the income of the audit practice (10% if the client is listed). The impact would be to artificially inflate the price of a drug which is required by a large number of people, and funded by public money. You are a manager in Monet & Co, a firm of accountants which has 12 offices and 30 partners, 10 of whom are members of ACCA. Notes Video Quiz Paper exam. Of course, there are some threats which are, in themselves, so serious that no adequate safeguards can mitigate against them. ACCA Lyceum is an innovative collaboration between ACCA Malaysia and Malaysia’s Platinum ALPs, bringing to you effective content to help you prepare for your ACCA exams with confidence. You may need to consider alerting appropriate authorities about this arrangement - in other words, to consider the act of ‘whistleblowing’ and all its wider implications for you, your organisation, its stakeholders and others. threats to an auditor’s objectivity and of the safeguards available and ... 1.220, Guidance on Ethical Matters for Members in Business, at the end of this Guide. Please visit our global website instead, Can't find your location listed? Typical threats 4 / 9. This video talk about fundamental ethical principles asked in ACCA SBL exam. Take ACCA Ethical and Professional Skills as soon as you can, to boost your overall performance on the professional papers. Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AAA Exams › ethical threats and safeguard This topic has 9 replies, 2 voices, and was last updated 1 year ago by Kim Smith. What are the alternative courses of action? Let’s explore each of the five steps using the following example: You’re the management accountant of a pharmaceuticals company. However, if this line is used to defend a practice that you think is wrong, consider suggesting alternatives. No, it’s part of a larger problem: namely coming into possession of knowledge of a wider conspiracy of a serious nature - in other words, that a cartel is being operated and that price-fixing is taking place, which you’re being asked to condone. How would I feel if my family, friends or neighbours knew I had done this? Your finance director asks you to contact the marketing director about the implications of increasing significantly the price of a generic drug you produce for thinning the blood in heart patients. Only you or a disinterested third party who knows all the facts can determine whether the threat is significant. These five are fundamental principles of ACCA’s ethical code. Threats can be real or perceived. << /Length 5 0 R /Filter /FlateDecode >> Previous Next. Do internal procedures exist that mitigate the threats? If not strictly illegal, the arrangement could be considered to be unethical, as it’s detrimental to the taxpayers who finance the national health service. Remember that logic errors are different from factual errors; a factual error is simply being wrong about the facts, but in a logic error, the statement leading to the conclusion doesn’t provide the necessary degree of support. I have uploaded BPP and Kaplan latest study material for all ACCA papers F1-P7 which you can download for Free. This is another example of emotive language. q6�m�9���n�C�'/|-Mѥ>Bݔ Based on the IESBA model, this principles-based approach to addressing ethical dilemmas will equip you to recognise threats and satisfy yourself that you’ve acted ethically when addressing them. "D %�Z�x���� There are numerous websites and platforms that offer Support, lectures, and study material to ACCA students. If you believe your ACCA exam result isn't reflecting your performance, you have the option to go for ACCA administrative… 0 Comments. This article considers a variety of ethical threats which a contemporary accountant working in the digital age may encounter and considers how these threats might be addressed. ��*Y��pő�WO�s��#. As a final step in the resolution of an ethical problem, you should consider whether you could look at yourself in a mirror with self-respect and take responsibility for the action taken. 2. The Five ethical threats in Auditing | Safeguards. Kim Smith. Either/or – ‘It’s either this or that; there are only two choices’. This article considers a variety of ethical threats which a contemporary accountant working in the digital age may encounter and considers how these threats might be addressed. %��������� On the other hand, it could be your problem, since doing this could be seen as helping to implement a potentially illegal arrangement. FREE Courses Blog. Although threats can make many different shape but broadly they can be classified in FIVE categories: Self-interest threat arises when stake of auditor or stake of any immediate or close family member of auditor is involved in the entity and thus he might cause the auditor to violate multiple ethical requirements. ACCA published Rulebook for all of its members, or appropriate to, students, affiliates or member firms of ACCA. Help is at hand in the form of the conceptual framework set out in our Rulebook. Conclusion The Ethical and Professional Skills module reinforces ACCA’s commitment to equipping students with the real-world skills to excel, and further proves that ACCA membership is the most valuable thing you can do for your career. Is it the real problem or part of a larger one? We have also produced ground-breaking work on sustainability. As you’re thinking about the issue, watch out for some common errors in logic. An example would be a financial interest in a client. The conceptual framework comprises five steps in the form of questions, which you should consider when confronted with an ethical dilemma: Finally, you should consider whether you can look yourself in the mirror after making the decision and applying any necessary safeguards. The request follows a pricing agreement drawn up between the three main companies supplying these drugs to the national health service of a country. October 28, 2020 ACCA. ACCA study texts, exam kits, notes Studying F8 The F8 Audit and Assurance exam assessments students' information of auditing and assurance concept but also, very importantly, their capability to practice that understanding to situations that they may well come across in their auditing careers. A4b. For example, safeguards can range from government regulations and professional standards, to people or policies in your workplace. 1. A. Acowtancy. 3. Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AAA Exams › ethical threats and safeguard. Which fundamental principles are threatened? In this example, you may: abide by the wishes of the finance director; resign; or take a less extreme course of action, such as discussing the issue with appropriate people initially. In this post, I'm going to share ACCA Study Material for paper Accountant in Business F1 to Advanced Audit &… 0 Comments. Risk Management - Ethical Threats - CIMA P2 Advanced Management Accounting November 2019 Syllabus Accounting ethics in the digital age - read this article along with other careers information, tips and advice on ACCA Careers. Advocacy threats -These can occur if you're promoting a position that compromises your objectivity, or promoting a position or opinion to the point that subsequent objectivity may be compromised. June 2015, Q1- Ethical threat Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › June 2015, Q1- Ethical threat This topic has 0 replies, 1 voice, and was last updated 17 minutes ago by draiells. Previous Next. Accountants (IFAC), ACCA is required to apply ethical standards that are at least as stringent as those stated in the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (the IESBA Code). ]�S�C�ny�����( �j;`�� �0` �F*���5���) ��\g��%|�藓��g�_�_�8�q May 4, 2019 at 10:57 am #514908. foeldh123. (a) Ethics. In the price-fixing example, it's likely that you would feel intimidated by the finance director, who presumably has an influence over your career prospects. These five are fundamental principles of ACCA’s ethical code. 5. Five types of Ethical Threats (a) Self-interest Self-interest means the accountant’s own interest being affected by the success of the client, or the continuation of the accountant-client relationship. You’re well aware of the fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour. Am I confident I can justify this decision. Acowtancy. (ACCA P1, 2008) Ethical dilemma can be inevitably occurring when the code cannot be honoured without apparent breach of another. December 27, 2020 ACCA Study Material / BPP / Kaplan. Threats to the fundamental principles can come from several directions: Self-interest threats - These come about if you or a close family member stands to gain (or not lose) something from a particular course of action. ACCA CIMA CAT DipIFR Search. Could the action give a negative perception? In order to resolve the conflict a choice must be made that by definition will leave at least one of the ethical principles compromised. December 17, 2020 ACCA. Beware of emotive language. These are designed to ensure that: Another safeguard is the education and training you underwent before entering the profession and the continuing professional development you’ve completed since qualifying as an accountant. This training teaches you current practices and helps keep you up-to-date with accounting standards and regulations. 4 Threats and safeguards Principles rather than rules based Both the IFAC and ACCA codes have developed a ‘principles approach’ rather than a ‘rules based’ approach to ethical professional behaviour. Is this a real problem or am I only avoiding a difficult task? If a threat is significant, you’ll want to put safeguards in place or rely on any that already exist. In our example, the fundamental principles most threatened are those of integrity and objectivity. What are the alternative courses of action? Viewing 10 posts - 1 through 10 (of 10 total) Author. In larger firms an individual office may exceed these limits as long as responsibility for signing off … In this case the problem certainly exists, but rather than just implementing the price change and ignoring the wider issue, or refusing to do so, you should sit down to discuss the larger problem with the finance director. 6�Z���c��$�99�,ʶ�Ȣ�)�8��.n�$Ѭ 7kS��J��;P=5��~�6�uy���ҹ(���1�����MY�2L��Lj�p���vlF����:H3/[N�,�nˮ������;�LR�� %PDF-1.3 An ethical safeguard provides guidance or a course of action which attempts to remove the ethical threat. A threat to independence is anything that means that the opinion of an auditor could be doubted. Threats to the fundamental principles can come from several directions: You should always consider what others would make of the situation and your proposed actions. The price-fixing example is one of integrity, and your objectivity may also be threatened, due to intimidation from the finance director and your desire to hold onto your job. In the Rulebook, Section 3 is about ACCA Code of Ethics and Conduct which is set out in four parts. This isn’t always the case. Codes of ethics typically provide examples of generic threats that affect auditors, which can be viewed as affecting both external and internal auditors. Auditor independence will be compromised where ethical threats are faced. Which of the following identifies the threat which could arise as a result of the finance director’s previous employment at Sycamore & Co and recommends an appropriate safeguard? Threats 3 / 7. Nature of ethical threats Threats to compliance with the fundamental ethical principles are grouped into five broad categories: a. Professional Ethics. Based on the IESBA model, this principles-based approach to addressing ethical dilemmas will equip you to recognise threats and satisfy yourself that you’ve acted ethically when addressing them. Self-review threats - These often exist when you're in the position of having to review your own work. If... then … – ‘If we do x then y will happen’. Self-interest threats - These come about if you or a close family member stands to gain (or not lose) something from a particular course of action. What would I tell my child or parent to do? ;d����h�-�C���ԏ'5�"�ms[n�l@l���ZW"��Ab��;��6߫�����(]Gjd��5@>��*�}��? This could put your objectivity at risk, as there's a tendency to support your own judgement. Effect: Self interest threat. In such situations, you may have to disengage from an assignment or refuse to participate in a particular course of action. Do internal procedures exist that mitigate the threats? I’m going to share the Top 5 ACCA Colleges in Pakistan that you should definitely consider if you plan to start ACCA.. No doubt ACCA is a difficult certification to complete but with hard work and the right platform, it becomes so much easier. Independence may be perceived to have been threatened. Ethical threats apply to accountants – whether in … You should try to establish the reason for the price-fixing arrangement and question its legality as well as its ethics. Topics will range across all the Strategic Professional papers and Law, with a focus on short, meaningful, and useful videos to help you pass your ACCA exam and continue your ACCA Journey. Self-interest threat. Everyone’s doing it - Stop and ask yourself two things if you hear these words: is everyone really doing it; and is it the right thing to do? What could go wrong with the solution chosen? If the client fees are a large proportion of a firm’s total fees, there is a significant self-interest threat. All or nothing - Like either/or, things are rarely so black and white. Viewing 10 posts - 1 through 10 (of 10 total) If you either fail to recognise threats to our fundamental principles, or ignore your responsibility to address them, you’ll be liable to disciplinary action. Whenever the IESBA Code is revised, the ACCA Rulebook is … 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. Which fundamental principles are threatened? The Five ethical threats in Auditing | Safeguards. A self-review threat; review the work performed by the previous audit manager B. Paragraph 100.12 of the IFAC Code provides: “Threats may be created by a broad range of relationships and circumstances. They are can be applied toboth external auditors and internal audit engagements. Both follow a conceptual framework which identifies: fundamental principles of ethical behaviour ; potential threats to ethical behaviour If you take the time to consider, you may find that some safeguards are already in place to help you. Significant value of goods and services are not accepted. The conceptual framework comprises five steps in the form of questions, which you should consider when confronted with an ethical dilemma: �j��{5��=����O�j�(���#3�qV�ů�^�j��|�7�;'Gm���nz�S����X��;s�{t��C{h:Vo��z_�Z�-@��]� 4. Top 4 websites for ACCA students. How would it look on the front page of the newspapers? You can sometimes spot a logic error by looking out for these words: In our example, the issue is one of possible price-fixing. Effect: Familiarity or Self interest threat. x�Z�rܸ��S�Q�����9i;�T*�c%{��@q0�r�)z��6��}�5���X�2���n|_w_�#}���2g%2��$�0�^R�y2���~���~Pm���WԖ��y�'�� �M�)���b/�� ��&���ʘR���$�Tt�{a��A&�o�YW@��c���g#xQ�yUP�Ki0�i��%T|/]�����gzw9j�`�'��&K|�LH/JdF�~�|vzA'���GO�Ogo6�ʟ�ӥȌ����g���G���>���ܜ�O�����+��f�3�N���K��d�7K��I��0�?���M��2�gr�5�j����fv��&`.�����_'����^=)"!�����|qOd &������v��䙣���Ф#�A����x�\��`�1`�7o�: Where you feel pressured to act against your professional judgement or to use information that you have about illegal or unethical behaviour, you might need to discuss this with your solicitor or your professional body. Typical threats from past papers in ACCA AAA (P7 INT). If the situation gets difficult, you may need to explore your options. These threats can take many forms, and certainly the example considered above isn't without self-interest. Free sign up Sign In. 3. There are often many other solutions to a problem beyond the two extremes mentioned. The global body for professional accountants, Can't find your location/region listed? Ethical threats: ACCA conceptual framework. There are many hardships related to studies in ACCA. In questions on ethics, you are likely to be looking out for ethical threats in the current arrangements, and trying to recommend appropriate responses (for example, ways to reduce the threats to an acceptable level) that are in line with ethical codes. This topic has 9 replies, 2 voices, and was last updated 1 year ago by . Familiarity threats - These can occur if you have (or develop) a close personal relationship with someone, and so you become too sympathetic to their interests. �SV]��- All three companies have agreed to increase their prices. ]���$f���n�j Ο��o�-�5[����3rUr¢ٛQv7�[������.�C�@�nn��fȩ\����#���N@Z��haK��nrإm�↺�f������^km��� �z�Ž�ÔI=ʵF�{�Oڵpe��[5��Z%c��u���@.�+�R��d?`D����*t�V�� �y�㨗�y��c�����4�����ߍ��F�$�X�+��r]X��K The ACCA code of ethics, for example, also provides examples of other threats that (normally) affect external auditors. Intimidation threats - These can occur if you're physically or verbally threatened, or if there's a perceived threat - perhaps to your career or prospects. Ethical threats apply to accountants - whether in practice or business. With so many colleges offering ACCA Program in Pakistan, it is difficult to choose which one to join. Threat: After audit, huge gifts, dinners etc. Is one or more of them being compromised, and how? © 2012 ACCA • 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. An ethical threat is a situation where a person or corporation is tempted not to follow their code of ethics. The five fundamental ethical principles set out in our ACCA Rulebook are: integrity - being straightforward and honest in all professional and business relationships; objectivity - not allowing bias, conflicts of interest or undue influence of others to override professional or business judgements; ACCA after intermediate| Eligibility criteria and requirements for ACCA. • Intimidation threat – the threat that a professional accountant will be The following analyses of th… Threat: Partner & client are friends. Posts. These threats can take many forms, and certainly the example considered above isn't without self-interest. Conflicts of interest 8 Conflicts of interest have an important bearing on objectivity and independence. FREE Courses Blog. This article considers a variety of ethical threats which a contemporary accountant working in the digital age may encounter and considers how these threats … (b) Internal control Read ACCA Careers – Skills builder articles and other careers information, tips and advice on ACCA Careers. (FIG, 2007) [Online] As there are argue in the regional variations in cultural, social and ethical norms, the IFAC code cannot capture important differences in … Accounting ethics in the digital age - read this article along with other careers information, tips and advice on ACCA Careers. Finally, there are safeguards you can create for yourself, such as: When you make a decision on a course of action you propose to take, you should be able to point to the principles being threatened, the nature of the threat, and the safeguards in place to reduce the threat to an acceptable level and allow the proposed course of action to go ahead. An introduction to ACCA AA (F8) A4b. In doing so, you might also ask yourself questions such as: Contact information for your local office, Becoming an ACCA Approved Learning Partner, Virtual classroom support for learning partners, The conceptual framework and ethical dilemmas. An ethical safeguard provides guidance or a course of action which attempts to remove the ethical threat. b�T�ue�?��j6P�׺�����h���UqS�x�;ȕ6�����ͦ=\7n�܊N�=ๅ�/K��Z�c��M>��(F� ACCA BT F1 MA F2 FA F3 LW F4 Eng PM F5 TX F6 UK FR F7 AA F8 FM F9 SBL SBR INT SBR UK … If you can’t identify an existing safeguard or implement a new one, you should refuse to carry out the activity in question. The safeguards to those threats vary depending on the specific threat. When ethics appears in an optional question in the Paper P7 exam, it is often a popular choice for candidates, but their answers often lack detail and are not well applied to the question scenario. We’ve always done it that way - You don’t want to change things simply for the sake of changing them. The problem you face is that, if you go along with it, you’re aiding and abetting an illegal/unethical process; if you don’t go along with it, there may be career implications or other problems for you in the future. ACCA Rulebook and Code of Ethics and Conduct. This may not always be the case. No exceptions - Rules that are followed blindly, without taking specific situations into account, can lead you to make wrong decisions. The following analyses of threats are included in the ethics codesof the UK professional accountancy bodies. Again, things are usually more grey than black and white. An ethical threat is a situation where a person or corporation is tempted not to follow their code of ethics. These safeguards can be reinforced by controls established in the work environment, such as: Unfortunately, the circumstances of our example would suggest that these safeguards aren’t going to be adequate in the face of the threats presented. This article aims to assist candidates in terms of knowledge and question technique when tackling a question on ethics Evaluate each of the issues described above, commenting on the ethical and professional issues raised and recommend any actions necessary in response to the issues identified. �� This approach has now been adopted by IFAC (the International Federation of Accountants, of which we are a member body) and the EC among others. The Five ethical threats … Such obstructions are called threats to fundamental principles. ETHICAL THREATS AND SAFEGUARDS Ethical conflict An ethical conflict (also known as an ethical dilemma) is when two ethical principles demand opposite results in the same situation. Ethical threats and safeguards. Study Material: ACCA F8 Audit & Assurance AA. Many students think that… 0 Comments. This has taken the form of identifying five potential threats to ethical The ACCA Code of Ethics is covered in this chapter however, both the IFAC and ACCA codes have the same roots and are, to all intents and purposes identical. Threat Safeguards; Self-Review: The threat that the auditor will not appropriately evaluate the results of a previous judgment made/or service performed by him: Provision of other services to an audit client (Note: other threats due to this are self-interest because of the fee element and advocacy 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. Please visit our global website instead. The 'disinterested third party' is the theoretical voice of reason you would consult to help you gain perspective on the issue. The discussion with CFO can threat the fundamental principles, in this discussion there are threats to integrity, Objectivity and Professional behavior.