Ethics form the foundation of trust in the accounting profession. Whether working in practice or industry, accountants frequently face situations that can challenge their objectivity and independence. Lindsay Webber, in her webinar Ethical Requirements for Accountants – A Refresher, highlighted how recognising ethical threats and applying the right safeguards is essential for maintaining professional integrity.

The Five Key Ethical Threats

Lindsay identified five types of threats accountants must be alert to:

1. Self-interest threat
   Arises when personal financial or non-financial interests influence professional judgment. For example, owning shares in a client’s business may compromise objectivity.
2. Self-review threat
   Occurs when an accountant is required to review their own work, such as preparing accounts and then auditing them. This makes it difficult to remain impartial.
3. Advocacy threat
   Happens when an accountant promotes a client’s position too strongly, such as representing them in disputes or during business sales. Over-identification can lead to overlooking issues or presenting information in a biased way.
4. Familiarity threat
   Develops when close personal or professional relationships with a client impair objectivity. Long-term engagements, friendships, or family connections can result in excessive trust.
5. Intimidation threat
   Emerges when an accountant feels pressured or bullied—whether by clients threatening to withdraw work, or within the firm where senior staff impose unreasonable demands or deadlines.

Recognising Threats in Practice and Industry

A key takeaway from the webinar was that threats are not confined to client relationships. While advocacy threats generally involve clients, familiarity and intimidation threats can also arise within firms. For instance, a partner pressuring junior staff to complete work quickly without regard for quality can represent an intimidation threat. Recognising that these pressures exist both externally and internally is critical.

Applying Appropriate Safeguards

Identifying threats is only the first step. The real challenge lies in managing them effectively through safeguards. Lindsay outlined several strategies:

• Involve senior staff: Assigning more experienced team members to engagements can strengthen oversight and reduce risk.
• Rotate staff: Changing team members working on long-term clients can help counteract familiarity threats.
• Separate responsibilities: Ensuring different individuals handle preparation and review tasks helps avoid self-review threats.
• Challenge intimidation: Creating a supportive firm culture and documenting pressures faced can reduce the risk of intimidation threats.
• Decline or end engagements: If no safeguard is possible—for example, in small firms with limited staff—the ethical response may be to step back from the assignment.

Crucially, safeguards should not only be applied but also documented. Proper records demonstrate that threats were identified and addressed, providing transparency if ethical conduct is ever questioned.

A Practical Mindset

Lindsay reminded accountants that the presence of a threat does not automatically mean unethical conduct. Threats are inevitable in professional life. What matters is the ability to recognise them early, apply effective safeguards, and make informed decisions about when to disengage.

By embedding this mindset into daily practice, accountants can protect both their professional integrity and the trust placed in them by clients, colleagues, and the wider public.

Ethical threats are part of the landscape for accountants. The key lies in staying vigilant, applying practical safeguards, and documenting every step. When safeguards are not possible, stepping away is the most ethical decision.

For the full webinar, please click here. Lindsay Webber covers the following topics during this course:

• The core ethical obligations under professional standards

• How to recognise ethical threats and apply appropriate safeguards

• Insights from case studies—what went wrong, and how it could have been avoided

• Practical tips to strengthen your ethical decision-making

The contents of this article are meant as a guide only and are not a substitute for professional advice. The authors accept no responsibility for any action taken, or refrained from, as a result of the material contained in this document. Specific advice should be obtained before acting or refraining from acting, in connection with the matters dealt with in this article.