APES 110 Code of Ethics for Professional Accountants Part C

Members in business are expected to support the legitimate and ethical objectives and the rules and procedures of their employing organisations. If a member in business faces pressure to behave in ways that could create threats to the fundamental principles, the conceptual framework described in Section A must be applied.

Examples of pressure a member in business may encounter that may create threats to compliance with the fundamental principles include (paragraph 310.2):

• acting contrary to law or regulation
• acting contrary to technical or professional standards
• facilitating unethical or illegal earnings management strategies
• lying to or otherwise intentionally misleading others
• issuing, or otherwise being associated with, a financial or non-financial report that materially misrepresents the facts.

The significance of any threats must be evaluated, and safeguards applied to eliminate the threats or reduce them to an acceptable level.

Examples of safeguards include (paragraph 310.3):

• obtaining advice, where appropriate, from within the employing organisation, an independent professional adviser or a relevant professional body
• using a formal dispute resolution process within the employing organisation 
• seeking legal advice.

A member in business is required to prepare or present information, which may be used internally or externally, fairly, honestly and in accordance with relevant professional standards. Where a member in business is not satisfied that the financial statements of the employing organisation have been prepared in accordance with the Australian Accounting Standards, the member is required to notify those charged with governance and qualify any declarations given by the member.

A member in business must not intentionally mislead an employer regarding the level of experience or expertise possessed, nor fail to seek appropriate expert advice and assistance when required.

The financial interests of a member in business, or those of their close family, may in some circumstances create threats to compliance with the fundamental principles. For example, a self-interest threat may be created when the decisions made by members in business affect their eligibility for, and value of, a profit-related bonus.

If threats are identified, their significance must be evaluated and safeguards applied to eliminate the threat or reduce it to an acceptable level.

Members in business cannot manipulate information or use confidential information for personal gain.

Members in business or their families may be offered gifts, hospitality, preferential treatment or inappropriate appeals to friendship or loyalty may be made to them. Offers of such inducements may create threats to compliance with the fundamental principles, such as self-interest threats. Self-interest threats or intimidation threats may be created if inducements are offered or accepted. The nature, value and intent of the offer will affect the existence and significance of the threat.

If a reasonable and informed third party, weighing all the specific facts and circumstances, would consider the inducement insignificant and not intended to encourage unethical behaviour, then a member in business may conclude that the offer is made in the normal course of business and may generally conclude that there is no significant threat to compliance
with the fundamental principles.

A member in business must evaluate the significance of any threats and apply safeguards when necessary to eliminate the threats or reduce them to an acceptable level. When the threats cannot be eliminated or reduced to an acceptable level through the application of safeguards, a member in business shall not accept the inducement.

Members in business cannot offer inducements to influence the judgement or decision-making process of an individual or organisation or to obtain confidential information.