The conceptual approach to the observance of the basic principles...

A conceptual approach to respecting the basic principles of ethics

General characteristic of the conceptual approach

The circumstances in which professional accountants (auditors) work may lead to the emergence of threats to violate fundamental moral principles.

There are a number of circumstances that can lead to unethical behavior in the work of accountants. The Code highlights the most typical for accounting professions threats to ethical behavior:

1) personal interest;

2) susceptibility to any relationship or opinion;

3) personal relationships;

4) intimidation.

In addition, the nature of tasks may vary and, therefore, there may be various threats that require different precautions. The ethical code establishes a conceptual approach to adherence to the basic principles of ethics, which requires that a professional accountant (auditor) identify, evaluate and respond to such threats.

Of course, it is impossible to foresee all situations in which such threats arise, as well as identify actions aimed at weakening them. Nevertheless, a professional accountant (auditor) can know, guess or imagine the possibility of violating fundamental moral principles. The elimination/mitigation of threats can be determined by certain measures.

In these cases, there are actions , which he must take (Figure 5.1):

- determine the existence of the very threat of violation of the fundamental principles;

- to assess its significance. In this case, the assessment is carried out taking into account the quantitative and qualitative factors;

- all threats must be divided into two groups: significant and minor;

- to develop appropriate measures to eliminate significant threats to the violation of fundamental principles or to reduce them to an acceptable level, in which fundamental principles are not at risk.

Actions to reduce the level of threats to violations of fundamental moral principles

Fig. 5.1. Actions to reduce the level of threats to violations of fundamental moral principles


The consulting firm, advertising accounting services, stated about the exclusive competence and experience of its staff members, despite the fact that it was created relatively recently.

In this case, there is a threat of violating the principle of objectivity when providing professional services as an accountant. The likelihood of a threat of objectivity will depend on the specific circumstances of the assignment and the nature of the work performed by the professional accountant.

The actions of the accountant in the presence of a real threat of violation of the principle of objectivity:

1) evaluate the significance of the threat;

2) Depending on the degree of its importance, take appropriate precautions that will either eliminate the threat or reduce it to an acceptable level, for example:

- remove the person concerned from the job;

- carry out supervision procedures;

- stop the financial or business relationship that causes such a threat;

- discuss the problem with the company's management;

- discuss the problem with the authorized persons of the client.

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