Explain with examples, threats for non-compliance of fundamental principles as they relate to chartered accountants in practice.
Chartered accountants (CAs) should be straightforward and honest in all professional and business relationships. That makes them meet the fundamental principle of integrity. Objectivity comes in when they do not allow bias, conflict of interest or undue influence of others to override their professional or business judgments. They have a continuing duty to maintain professional knowledge and skill at the level required to ensure that a client receives competent professional services based on current developments in practice, legislation and techniques. A CA should act diligently and in accordance with applicable technical and professional standards, thus acting with professional competence and due care
CAs should respect the confidentiality of information acquired as a result of professional and business relationships and should not disclose any such information to third parties without proper and specific authority unless there is a legal or professional right or duty to disclose. They should have professional behaviour in that they comply with relevant laws and regulations and should avoid any action that discredits the profession.
Compliance with the above fundamental principles may potentially be threatened by a broad range of relationships and circumstances. When a relationship or circumstance creates a threat, such a threat could compromise, or could be perceived to compromise a chartered accountant’s compliance with the fundamental principles. A relationship or circumstance may create more than one threat, and a threat may affect compliance with more than one fundamental principle.
The nature and significance of the threats may differ depending on whether they arise in relation to the provision of services to an audit client and whether the audit client is a public interest entity, to an assurance client that is not an...