Exposure Draft - ACRA

Section 200
Introduction
CODE OF PROFESSIONAL CONDUCT AND ETHICS FOR PUBLIC ACCOUNTANTS
200.1 This Part of the Code illustrates how the conceptual framework contained in Part A is to
be applied by public accountants. The examples in the following sections are not
intended to be, nor should they be interpreted as, an exhaustive list of all circumstances
experienced by a public accountant that may create threats to compliance with the
principles. Consequently, it is not sufficient for a public accountant merely to comply
with the examples presented; rather, the framework should be applied to the particular
circumstances faced.
200.2 A public accountant should not engage in any business, occupation or activity that
impairs or might impair integrity, objectivity or the good reputation of the profession
and as a result would be incompatible with the rendering of public accountancy
services.
Threats and Safeguards
200.3 Compliance with the fundamental principles may potentially be threatened by a broad
range of circumstances. Many threats fall into the following categories:
(a)
(b)
(c)
(d)
(e)
Self-interest;
Self-review;
Advocacy;
Familiarity; and
Intimidation.
These threats are discussed further in Part A of this Code.
The nature and significance of the threats may differ depending on whether they arise in
relation to the provision of services to a financial statement audit client * , a nonfinancial
statement audit assurance client * or a non-assurance client.
200.4 Examples of circumstances that may create self-interest threats for a public accountant
include, but are not limited to:
(a) A financial interest * in a client or jointly holding a financial interest with a client.
(b) Undue dependence on total fees from a client.
(c) Having a close business relationship with a client.
(d) Concern about the possibility of losing a client.
(e) Potential employment with a client.
(f) Contingent fees * relating to an assurance engagement.
(g) A loan to or from an assurance client or any of its directors or officers.
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