Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › Objectivity
- This topic has 3 replies, 2 voices, and was last updated 5 years ago by Kim Smith.
- AuthorPosts
- March 25, 2019 at 10:13 pm #510432
Hello sir,
Kaplan’s study text refers to threats (self-interest, self-review etc.) as threats only to objectivity. Is that correct? Thank you so much.March 26, 2019 at 7:11 am #510450(Please note that I do not have the text to confirm that this is what it states.)
The conceptual framework approach looks at threats to compliance with the fundamental principles generally – so not just objectivity.
Independence is not a fundamental principle but the definition of independence includes acting with integrity and exercising objectivity and professional scepticism. Failure to exercise professional scepticism could result in a lack of diligence that would be a threat to professional competence and due care.
Different threats affect different fundamental principles. For example, when we are talking about auditors and audit clients, the significance of any threats to independence has to be evaluated (because the auditor’s report in an independent auditor’s report).
Although self-interest and self-review threats threaten objectivity – they will also threaten integrity (because they threaten independence) – but they could threaten other fundamental principles also.
For example overdue fees create a self-interest threat. Performing another audit with fees outstanding could threaten professional competence if the auditor were to “cut corners” on audit work (to reduce further costs).March 26, 2019 at 4:56 pm #510502Thank you very much. It has a diagram and in the centre of all these threats is only the objectivity but I totally agree with you as it was bizarre to me what the book illustrates. Thank you again,
March 26, 2019 at 6:10 pm #510514You are very welcome.
- AuthorPosts
- The topic ‘Objectivity’ is closed to new replies.