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What is the primary obligation imposed by the principle of integrity for accounting professionals?
What is the primary obligation imposed by the principle of integrity for accounting professionals?
Accounting professionals should knowingly associate with reports that contain materially false statements.
Accounting professionals should knowingly associate with reports that contain materially false statements.
False
Name one type of threat to compliance with professional principles according to the content.
Name one type of threat to compliance with professional principles according to the content.
Self-interest threats
An accounting professional should disassociate from known information that is __________ or __________ to uphold the principle of integrity.
An accounting professional should disassociate from known information that is __________ or __________ to uphold the principle of integrity.
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Match the threats to compliance with their descriptions:
Match the threats to compliance with their descriptions:
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Which of the following reflects the principle of objectivity for accounting professionals?
Which of the following reflects the principle of objectivity for accounting professionals?
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An accounting professional should engage in activities that may compromise their objectivity.
An accounting professional should engage in activities that may compromise their objectivity.
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What should an accounting professional avoid to maintain their objectivity?
What should an accounting professional avoid to maintain their objectivity?
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The principle that requires accounting professionals to exercise __________ and allow for timely decisions is known as Professional Competence and Due Care.
The principle that requires accounting professionals to exercise __________ and allow for timely decisions is known as Professional Competence and Due Care.
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Match the following threats to objectivity with their descriptions:
Match the following threats to objectivity with their descriptions:
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What is the primary role of an accountant in public practice regarding professional competence?
What is the primary role of an accountant in public practice regarding professional competence?
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An accountant should ignore negative feedback to maintain professionalism.
An accountant should ignore negative feedback to maintain professionalism.
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What is one of the reasons for upholding professional competence?
What is one of the reasons for upholding professional competence?
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Accountants face __________ due to a long or close relationship with a client or employer.
Accountants face __________ due to a long or close relationship with a client or employer.
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Which of the following reflects an accountant's responsibility when providing professional services?
Which of the following reflects an accountant's responsibility when providing professional services?
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Match the professional competence requirements to their descriptions:
Match the professional competence requirements to their descriptions:
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Diligent practice according to applicable standards is optional for accountants.
Diligent practice according to applicable standards is optional for accountants.
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What should accountants do in response to negative feedback from clients?
What should accountants do in response to negative feedback from clients?
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Accountants must maintain a continuing awareness of __________ and professional developments.
Accountants must maintain a continuing awareness of __________ and professional developments.
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What illustrates a threat to professional competence?
What illustrates a threat to professional competence?
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Study Notes
Role of Professional Accountant in Business
- Provide useful financial information (about the organization) to internal and external users.
- This information is used for making appropriate and timely decisions and assessing the organization's management.
- Accountants help protect the public and gain their confidence by ensuring proper conduct and reprimanding misconduct.
Importance of Ethics for Accounting
- Shareholders, potential investors, and other users rely on financial statements for making informed decisions.
- The ISCA (EP)100 outlines fundamental principles that accounting professionals must comply with.
- These principles ensure that accounting professionals uphold integrity, objectivity, professional competence and due care, confidentiality, and professional behavior.
Reasons for Upholding Values Required of Accounting Professionals
- Maintaining professional competence involves both attaining and maintaining professional knowledge and skills.
- Accounting professionals need to be aware of relevant, professional, and business developments.
- They must stay informed about changes in relevant financial reporting standards.
- Professionals must ensure confidentiality within the company and social environment.
- This includes being alert to possible inadvertent disclosure of confidential information.
- The duty to maintain confidentiality also applies after the end of employer/accounting client relationships.
Threats to Compliance of Professional Principles
- Threats can arise from relationships and circumstances.
- Self-interest threats involve financial or other interests that inappropriately influence an accountant's judgment or behavior. Examples include having close relationships with potential bidders offering gifts or negotiating employment with competing companies.
- Advocacy threats compromise objectivity when promoting an employer's position excessively. Examples include promoting company products on social media or pushing for a promotion despite negative feedback.
- Familiarity threats arise due to long or close relationships with clients or employers, potentially leading to sympathy or undue influence.
- Examples include being pressured to agree with a manager's judgement based on work experience or feeling pressured to cover up company's malpractices.
Safeguards Against Threats
- Safeguards are actions or measures that eliminate or reduce threats to an acceptable level.
- They can be created by the accounting profession, legislation, or regulation.
- Safeguards include:
- Education, training, and experience requirements for entering the profession.
- Continuing professional development requirements.
- Corporate governance regulations.
- Professional standards.
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Description
This quiz explores the essential role of professional accountants in business operations and the importance of ethical practices in accounting. It covers how accountants provide financial information to stakeholders and the ethical guidelines set forth by ISCA. Understand the values that accounting professionals must uphold to ensure trust and integrity in the financial reporting process.
