ACCA SBR ^INT Syllabus A. Fundamental Ethical And Professional Principles - Conceptual Framework - Notes ^{6 / 11}

The Conceptual Framework helps ACCA members deal with situations that might make it hard to follow the fundamental principles. It guides them to recognise, assess, and handle these situations instead of just following strict rules.

Members must use safeguards to get rid of or lessen threats to the fundamental principles unless the threats are minor.

This way, they can ensure they still follow these principles.

The Framework lets members think about the challenges they encounter and decide what to do about them.

While there are examples in the Framework, it doesn't cover every situation. Members need to use it based on their specific circumstances.

Threats to the Fundamental Principles

1. Self-Interest Threat:

   This is when a financial interest or other personal gain might improperly affect how a professional accountant makes judgments or acts

2. Self-Review Threat:

   This happens when a professional accountant doesn't properly assess the outcomes of their previous decisions or actions, or those of someone in their firm or organisation. They might rely on these when making new decisions

3. Advocacy Threat:

   This threat occurs when a professional accountant pushes a client's or organisation's interests so much that it compromises their objectivity

4. Familiarity Threat:

   This is the risk that because of a long or close relationship with a client or organisation, a professional accountant becomes too friendly or accepting of their work, which could be problematic

5. Intimidation Threat:

   This threat happens when a professional accountant is discouraged from acting impartially due to actual or perceived pressures, like attempts to overly influence them

If threats aren't at an okay level, you have to deal with them. Using safeguards is one way to deal with threats.

Safeguards are actions that an accountant takes to reduce threats to an acceptable level. The specific safeguards you use will depend on the situation.

When accountants make decisions about these safeguards, they should think like a reasonable and informed outsider.

This outsider would look at all the facts and say if the accountant is following the rules.

Example

if there's a threat from taking gifts, safeguards could include:

• Telling your boss about the gift.

• Keeping a record of the gift.

• Having someone else check your work related to the person who gave you the gift.

• Giving the gift to charity and telling your boss.

• Paying back the cost of the gift.

• Returning the gift as soon as possible.