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Threats to Fundamental Principles in the ACCA Code of Ethics

Updated 11 October 2026 · Fact-checked

Threats to fundamental principles are circumstances that could stop an accountant acting with integrity, objectivity, professional competence and due care, confidentiality or professional behaviour. There are five types: self-interest, self-review, advocacy, familiarity and intimidation. To answer a question, find the situation's key trigger, then match it to the threat it creates.

Understand Threats to Fundamental Principles

The ACCA Code of Ethics sets out fundamental principles: integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour. A threat is a situation that could stop you following one or more of them. A threat does not mean you have already broken a principle. It means there is a risk that you might.

The Code groups threats into five categories. Learn each one by its trigger.

Self-interest: your own financial or other interest could influence your judgement. Example: you own shares in a client, or you depend on one client for most of your fees.
Self-review: you have to evaluate your own earlier work or judgement. Example: you prepare a client's accounts and then audit them, or you review a valuation you produced yourself.
Advocacy: you promote a client's or employer's position so strongly that your objectivity is compromised. Example: you speak for a client in a dispute with a third party, or you help sell the company's shares to investors.
Familiarity: a close relationship makes you too sympathetic to someone's interests or too accepting of their work. Example: a long-serving audit partner trusts a finance director who is also a close friend.
Intimidation: you are deterred from acting objectively by actual or feared pressure. Example: a director threatens to dismiss you unless you approve an aggressive accounting treatment.

The difference students most often confuse is self-interest versus self-review. Self-interest is about what you gain or lose. Self-review is about checking your own work. A fee dispute with a client is self-interest. Auditing figures you posted yourself is self-review.

Threats can apply to accountants in practice and to accountants in business. In an exam scenario, read for the facts that point to a threat, then name the category and the principle at risk. Safeguards, which reduce a threat to an acceptable level, are a separate step and are covered under related topics.

Key formulas to remember

Five fundamental principles: Integrity, Objectivity, Professional competence and due care, Confidentiality, Professional behaviour; Each threat puts one or more of these at risk. Name the principle when asked what is affected.
Five categories of threat: Self-interest, Self-review, Advocacy, Familiarity, Intimidation; Memory aid: SSAFI, or think of the sentence 'Some Students Always Find Intimidation'. Use whatever helps you recall all five.
Self-interest test: Own gain or loss could influence judgement; Look for shares, fees, loans, gifts, bonuses or job security.
Self-review test: Evaluating your own (or your firm's) earlier work; Look for 'prepared and then reviewed', 'same team', 'provided the system and then audited it'.
Advocacy test: Promoting a client's or employer's position; Look for acting as spokesperson, negotiator, or promoter of shares.
Familiarity test: Close or long relationship reduces scepticism; Look for family, friendship, or a long association with the same client or person.
Intimidation test: Actual or perceived pressure to act in a certain way; Look for threats of dismissal, litigation, loss of the client, or dominant personalities.

How to solve Threats to Fundamental Principles questions

Use this method for any question that gives a scenario and asks you to identify the threat.

1Read the scenario and underline the key facts about relationships, interests, pressure or past work.
2Ask: who is the accountant and what role are they in (practice or business)?
3Test each category in turn: gain or loss (self-interest), own earlier work (self-review), promoting a position (advocacy), close relationship (familiarity), pressure (intimidation).
4Choose the category that best matches the main trigger. If two seem possible, pick the one the wording points to most directly.
5Identify which fundamental principle is at risk, usually objectivity, but also integrity or professional behaviour.
6If the question asks, state a suitable safeguard, such as a second reviewer, rotation of staff, or declining the work.
7Check your answer against the question: are you asked for one threat, the name, or a description?

Quickest way: Trigger-word matching

When to use it: Use this for single-answer multiple choice questions where time is short, at roughly a minute or less per two-mark question.

Scan the scenario for one trigger word.
Money, shares, fees, loan, bonus, job security: self-interest.
Prepared, reviewed, audited own work: self-review.
Represent, promote, negotiate, defend: advocacy.
Friend, relative, long relationship: familiarity.
Threat, pressure, dismissal, bullying: intimidation.
Eliminate options that do not fit and select the best match.

Common mistakes in Threats to Fundamental Principles

Calling self-review a self-interest threat because the accountant is 'protecting their own work'.
Both involve 'self', and a reviewer may indeed want their work to look good.
Fix: Ask what the core issue is. If the accountant checks their own earlier work, choose self-review. Choose self-interest only when a financial or personal gain or loss is the key factor.
Choosing intimidation for any difficult client.
Students treat any awkward situation as pressure.
Fix: Intimidation needs actual or feared pressure that deters objective action, such as a threat of dismissal. A friendly relationship is familiarity.
Confusing familiarity with self-interest when a gift is involved.
A gift links to both a relationship and a benefit.
Fix: A gift or hospitality that could influence judgement is usually self-interest. A long, close personal relationship with no benefit is familiarity.
Thinking a threat means the accountant has already breached the code.
The word 'threat' sounds like a violation.
Fix: A threat is a risk to compliance. Breach only occurs if the accountant acts against a principle. Safeguards can reduce a threat to an acceptable level.
Missing advocacy when an accountant helps a client in a dispute or share issue.
Advocacy is the least familiar category and can look like normal support.
Fix: Look for the accountant taking a side or promoting a position on behalf of a client or employer. That is advocacy.
Naming a threat but not the principle at risk.
Students stop once they have the category.
Fix: Add one line linking the threat to the principle, for example 'objectivity is at risk because...'.

Worked examples

Example 1

An accountant in business is told by the finance director that he will lose his job unless he signs off a revenue figure that he believes is overstated. The accountant also receives a bonus linked to company profit. Identify the main threat and the principle at risk, and name one other threat to the accountant.

Show the solution

Find the key fact: the accountant is told he will lose his job unless he signs off.
This is pressure that deters objective action, so the main threat is intimidation.
The principle most at risk is integrity, because signing a figure he believes is overstated would be dishonest. Objectivity is also at risk because the pressure could stop him judging the figure fairly.
The accountant's own bonus is linked to profit. A higher revenue figure would raise his bonus, so his own gain could influence his judgement. His job security is also at stake. Both are self-interest threats to the accountant.
State the other threat clearly: self-interest, arising from the accountant's profit-linked bonus and his job security.

Answer: Main threat: intimidation, putting integrity and objectivity at risk. Another threat to the accountant: self-interest, arising from his profit-linked bonus and his job security.

Exam tips

In objective tests, find the single trigger word before reading the options.
For multiple response questions, check the number you must select and match each option to one category only.
Do not mix up self-interest and self-review. Ask whether the issue is gain or checking own work.
If the question asks for a safeguard, give one practical action that fits the threat, such as using a different reviewer for self-review.
Remember that Section B scenario questions may ask you to name the threat and the principle at risk, so practise giving both.

Practice questions from Ethical conflicts and dilemmas

Threats to Fundamental Principles in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

ACCA Strategic ProfessionalIESBA Code of Ethics: Fundamental Principles and Threats

Threats to Fundamental Principles: frequently asked questions

What are the five threats to the fundamental principles?

They are self-interest, self-review, advocacy, familiarity and intimidation. Each is a situation that could stop you following integrity, objectivity, professional competence and due care, confidentiality or professional behaviour.

What is the difference between a self-interest and a self-review threat?

Self-interest arises when your own gain or loss, such as fees, shares or a bonus, could influence your judgement. Self-review arises when you must assess work or a judgement you or your firm made earlier. One is about personal benefit, the other about checking your own work.

Can one scenario involve more than one threat?

Yes. A scenario can create several threats at once, such as intimidation and self-interest. In multiple choice, choose the best match to the main trigger. In longer questions, name each one you can support from the facts.

Do threats mean the accountant has acted unethically?

No. A threat is a risk to compliance with the principles. The accountant must evaluate it and apply safeguards, or decline the work if the threat cannot be reduced to an acceptable level.