ACCOUNTANT

Paper P7, Advanced Audit and Assurance often contains question scenarios and requirements dealing with ethical issues, in both the compulsory and optional questions. When ethics appears in an optional question, it seems to be a popular choice for candidates in the exam, but answers are often lacking in detail and not well applied to the question scenario. The purpose of this article is to assist candidates in terms of knowledge and question technique when tackling a question on ethics. The IESBA Code IESBA’s (IFAC’s) Code of Ethics for Professional Accountants provides a conceptual framework that requires a professional accountant to identify, evaluate, and address threats to compliance with the fundamental principles. The conceptual framework approach should assist professional accountants to comply with the ethical requirements of the IESBA Code, and to serve the public interest. Guidance is provided in several areas: the identification of threats; the evaluation of the significance of those threats; and the use of safeguards that may serve to reduce threats to an acceptable level. In addition there are circumstances in which safeguards cannot reduce a threat to an acceptable level, and guidance is given on this also. Each of these points is discussed below. Threats to compliance with the