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Unformatted text preview: A professional accountant shall evaluate any threats to compliance with the fundamental
principles when the professional accountant knows, or could reasonably be expected to know, of
circumstances or relationships that may compromise compliance with the fundamental principles. 100.9 A professional accountant shall take qualitative as well as quantitative factors into account when
evaluating the significance of a threat. When applying the conceptual framework, a professional
accountant may encounter situations in which threats cannot be eliminated or reduced to an
acceptable level, either because the threat is too significant or because appropriate safeguards are
not available or cannot be applied. In such situations, the professional accountant shall decline or
discontinue the specific professional service involved or, when necessary, resign from the
engagement (in the case of a professional accountant in public practice) or the employing
organization (in the case of a professional accountant in business). 140 100.10 A professional accountant may inadvertently violate a provision of this Code. Depending on the
nature and significance of the matter, such an inadvertent violation may be deemed not to
compromise compliance with the fundamental principles provided, once the violation is
discovered, the violation is corrected promptly and any necessary safeguards are applied.
100.11 When a professional accountant encounters unusual circumstances in which the application of a
specific requirement of the Code would result in a disproportionate outcome or an outcome that
may not be in the public interest, it is recommended that the professional accountant consult with
a member body or the relevant regulator.
Threats and Safeguards
100.12 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
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- Spring '14