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Unformatted text preview: and Accounting Standards Council (AASC); and
Each of these fundamental principles is discussed in more detail in Sections110–150.
Conceptual Framework Approach
100.6 The circumstances in which professional accountants operate may create specific threats to
compliance with the fundamental principles. It is impossible to define every situation that creates
threats to compliance with the fundamental principles and specify the appropriate action. In
addition, the nature of engagements and work assignments may differ and, consequently,
different threats may be created, requiring the application of different safeguards. Therefore, this
Code establishes a conceptual framework that requires a professional accountant to identify,
evaluate, and address threats to compliance with the fundamental principles. The conceptual
framework approach assists professional accountants in complying with the ethical requirements
of this Code and meeting their responsibility to act in the public interest. It accommodates many
variations in circumstances that create threats to compliance with the fundamental principles and
can deter a professional accountant from concluding that a situation is permitted if it is not
100.7 When a professional accountant identifies threats to compliance with the fundamental principles
and, based on an evaluation of those threats, determines that they are not at an acceptable level,
the professional accountant shall determine whether appropriate safeguards are available and can
be applied to eliminate the threats or reduce them to an acceptable level. In making that
determination, the professional accountant shall exercise professional judgment and take into
account whether a reasonable and informed third party, weighing all the specific facts and
circumstances available to the professional accountant at the time, would be likely to conclude
that the threats would be eliminated or reduced to an acceptable level by the application of the
safeguards, such that compliance with the fun...
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This document was uploaded on 04/03/2014.
- Spring '14