Introduction (230.1 to 230.2)
230.1
Professional accountants are required to comply with the fundamental principles and apply the conceptual framework set out in Section 120 to identify, evaluate and address threats.
230.2
Acting without sufficient expertise creates a self-interest threat to compliance with the principle of professional competence and due care. This section sets out specific requirements and application material relevant to applying the conceptual framework in such circumstances.
Requirements and Application Material
General (R230.3 to R230.4)
R230.3
A professional accountant shall not intentionally mislead an employing organization as to the level of expertise or experience possessed.
230.3 A1
The principle of professional competence and due care requires that a professional accountant only undertake significant tasks for which the accountant has, or can obtain, sufficient training or experience.
230.3 A2
A self-interest threat to compliance with the principle of professional competence and due care might be created if a professional accountant has:
Insufficient time for performing or completing the relevant duties.
Incomplete, restricted or otherwise inadequate information for performing the duties.
Insufficient experience, training and/or education.
Inadequate resources for the performance of the duties.
230.3 A3
Factors that are relevant in evaluating the level of such a threat include:
The extent to which the professional accountant is working with others.
The relative seniority of the accountant in the business.
The level of supervision and review applied to the work.
230.3 A4
Examples of actions that might be safeguards to address such a self-interest threat include:
R230.4
If a threat to compliance with the principle of professional competence and due care cannot be addressed, a professional accountant shall determine whether to decline to perform the duties in question. If the accountant determines that declining is appropriate, the accountant shall communicate the reasons.
Other Considerations (230.5 A1)
230.5 A1
The requirements and application material in Section 270 apply when a professional accountant is pressured to act in a manner that might lead to a breach of the principle of professional competence and due care.
Building Blocks Approach
Complying with Part 2 requires knowing, understanding and applying:
- Part 1 - The fundamental principles and the conceptual framework
- Part 2 - The provisions set out in a particular section that are relevant to the specific circumstance (Each 2xx section is also linked to 200)
The IESBA has applied a building blocks approach in establishing the structure of the Code. The conceptual framework set out in Part 1, Section 120, applies to all professional accountants (PAs) and is not repeated in subsequent Parts or sections but is expected to be applied by all PAs in the conduct of professional activities.
As an illustration of the building blocks approach:
- In all situations, paragraphs 120.8 A1 to 120.8 A2 of the conceptual framework identify conditions, policies and procedures that might be "factors relevant to evaluating the level of threats."
- Incremental application material for evaluating threats is provided for professional accountants in business (PAIBs) in paragraphs 200.7 A1 to 200.7 A3.
- Incremental context-specific factors are then included in each section and in each Part of the Code to emphasize the factors that are relevant to evaluating the level of the threat created by the specific circumstance.
Building Blocks Approach
Complying with Part 2 requires knowing, understanding and applying:
- Part 1 - The fundamental principles and the conceptual framework
- Part 2 - The provisions set out in a particular section that are relevant to the specific circumstance (Each 2xx section is also linked to 200)
The IESBA has applied a building blocks approach in establishing the structure of the Code. The conceptual framework set out in Part 1, Section 120, applies to all professional accountants (PAs) and is not repeated in subsequent Parts or sections but is expected to be applied by all PAs in the conduct of professional activities.
As an illustration of the building blocks approach:
- In all situations, paragraphs 120.8 A1 to 120.8 A2 of the conceptual framework identify conditions, policies and procedures that might be "factors relevant to evaluating the level of threats."
- Incremental application material for evaluating threats is provided for professional accountants in business (PAIBs) in paragraphs 200.7 A1 to 200.7 A3.
- Incremental context-specific factors are then included in each section and in each Part of the Code to emphasize the factors that are relevant to evaluating the level of the threat created by the specific circumstance.