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Ethics for Accountants

In: Business and Management

Submitted By z999zz
Words 510
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Q1. The process the chief accountant may ethically approach According to the “Code of Ethics for Professional Accountants”, a professional accountant should comply with the fundamental principles including integrity, objectivity, professional competence and due care, confidentiality, and professional behavior (S100.5). When the chief accountant identifies threats to compliance with the fundamental principles and those threats are not at an acceptable level (violation of HKAS 18), the chief accountant must decide whether appropriate safeguards can be available and applied to eliminate or reduce the threats to an acceptable level. During the decision making process, the chief accountant should exercise professional judgment and consider whether a reasonable and informed third party, and need to weigh all the specific facts and circumstances available (100.7). Threats can be classified into self-interest threat, self-review threat, advocacy threat, familiarity threat, and intimidation threat (100.12). In this case, the CEO instructs the chief accountant to defer the revenue recognition to next fiscal year therefore the chief accountant is facing intimidation threat which occurs when the chief accountant is deterred from acting objectively because of actual or perceived pressures, including attempts to exercise undue influence over the professional accountant. During a formal or informal ethical conflict resolution process, the chief accountant should take into account of relevant facts; ethical issues involved; fundamental principles related to the matter in question; established internal procedures; and alternative courses of action. If it remains unresolved, the chief accountant may consult other appropriate persons within Greater Asia Ltd. (100.18) such as the board of directors or the audit committee (100.19). If the issue cannot be resolved, the...

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