CAT / FIA FBT Syllabus F. Professional Ethics In Accounting And Business - Threats to Ethical Behaviour - Notes ^{2 / 4}

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”