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ACCA Applied Knowledge · Business and Technology · Fundamental principles of ethical behaviour

Which of the following is an example of a self-interest threat to compliance with the fundamental principles?

Holding shares in a client whose results the accountant is reviewing is a self-interest threat, because a financial interest could inappropriately influence judgement. Reviewing one's own work is self-review, pressure from a director is intimidation, and excessive trust in a colleague is familiarity.

  1. AAn accountant holds shares in a client company whose results she is reviewingCorrect
  2. BAn accountant is asked to review her own earlier work
  3. CAn accountant is intimidated by a dominant director into agreeing to a treatment
  4. DAn accountant is too trusting of a long-standing colleague

Explanation

A self-interest threat arises when a financial or other interest could inappropriately influence judgement, such as owning shares in a client being reviewed. Reviewing one's own work is self-review, intimidation is a threat of that name, and excessive trust through long association is familiarity.

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