Explain the types of ethical threats.



The dynamic environment in which business operate today has posed many situation because of which compliance with fundamental principles may be potentially threatened.

Such threats are classified as follows:-

1)   Self Interest threats – which may occur as the result of the financial or other interest of a finance and accounting professional or of an immediate or close family members.

2)   Self review threats – which may occur when a previous judgement needs to be revaluated by the finance and accounting professional responsible for that judgement.

3)   Advocacy threats – Advocacy is the act of arguing on behalf of a particular issue, idea or person.

These threats occur when professional promotes a position or opinion to the point that subsequent objectivity may be compromised.

4)   Familiarity threats – occur when professionals has close relationship in the work environment &

such relationship impair his selfless attitude towards work.

5)   Intimidation threats – occur when a professional may be prohibited from acting objectively by threats, actual or perceived.

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