The significance of the threat has been evaluated the

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Unformatted text preview: legal form of the relationship with the employing organization, if any, has no bearing on the ethical responsibilities incumbent on the professional accountant in business. 300.4 A professional accountant in business has a responsibility to further the legitimate aims of their employing organization. Part C does not seek to hinder a professional accountant in business from properly fulfilling that responsibility, but considers circumstances in which conflicts may be created with the absolute duty to comply with the fundamental principles. 300.5 A professional accountant in business often holds a senior position within an organization. The more senior the position, the greater will be the ability and opportunity to influence events, practices and attitudes. A professional accountant in business is expected, therefore, to encourage an ethics-based culture in an employing organization that emphasizes the importance that senior management places on ethical behaviour. 300.6 The examples presented in the following sections are intended to illustrate how the conceptual framework is to be applied and are not intended to be, nor should they be interpreted as, an exhaustive list of all circumstances experienced by a professional accountant in business that may create threats to compliance with the principles. Consequently, it is not sufficient for a professional accountant in business merely to comply with the examples; rather, the framework should be applied to the particular circumstances faced. 96 By-Laws (On Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants [Issued January 2007] PART I: BY-LAWS ON PROFESSIONAL ETHICS Threats and Safeguards 300.7 Compliance with the fundamental principles may potentially be threatened by a broad range of circumstances. Many threats fall into the following categories: (a) Self-interest; (b) Self-review; (c) Advocacy; (d) Familiarity; and (e) Intimidation. These threats are discussed further in Part A. 300.8 Examples of circumstances that may create self-interest threats for professional accountant in business include, but are not limited to: (a) Incentive compensation arrangements. (c) Inappropriate personal use of corporate assets. (d) Concern over employment security. (e) 300.9 Financial interests, loans or guarantees. (b) a Commercial pressure from outside the employing organization. Circumstances that may create self-review threats include, but are not limited to, business decisions or data being subject to review and justification by the same professional accountant in business responsible for making those decisions or preparing that data. 300.10 When furthering the legitimate goals and objectives of their employing organizations professional accountants in business may promote the organization’s position, provided any statements made are neither false nor misleading. Such actions generally would not create an advocacy threat. 300.11 Examples of circumstances that may create familiar...
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