Question Tag: Ethical behavior

Threats to Ethical Behaviour as a Management Accountant:

1. Self-interest threat:
   The threat that a financial or other interest will inappropriately influence the management accountant’s judgment or behaviour. For example, the potential for personal gain could lead to biased decision-making.
2. Self-review threat:
   The threat that a professional accountant will not appropriately evaluate the results of a previous judgment made or service performed by the management accountant, or by another individual within the management accountant’s firm or employing organisation, on which the accountant will rely when forming a judgment as part of providing a current service.
3. Advocacy threat:
   This occurs when a professional accountant promotes a client’s or employer’s position to the point that the management accountant’s objectivity is compromised. For instance, pushing for the CEO’s friend to win the contract could bias the accountant’s professional judgment.
4. Familiarity threat:
   The threat that due to a long or close relationship with a client or employer, a management accountant will be too sympathetic to their interests or too accepting of their work. The estate manager’s familiarity with the CEO may have influenced the decision to act unethically.
5. Intimidation threat:
   The threat that a professional accountant will be deterred from acting objectively because of actual or perceived pressures, including attempts to exercise undue influence over the management accountant. For example, pressure from the CEO could lead to decisions that go against professional ethics.