Examining the Threats to Compliance with the Accounting Ethics Principles

Accounting ethics became an important issue worldwide due to many recent accounting frauds and financial scandals. Financial reporting quality must be high (containing accounting information that is unbiased, relevant, complete, and correct) so that financial statements could be reliable to all stakeholders. Financial reporting quality can be jeopardized if professional accountants act in an unethical manner. Therefore, the ethics of accountants is of public interest since it has a wide effect. The various circumstances (professional activities, interests, and relationships) in which accountants work might create threats to compliance with the fundamental accounting principles. In order to avoid various ethical dilemmas, professional accountants should consult The International Code of Ethics for Professional Accountants. This code provides a conceptual framework as well as guidelines that should be applied in order to identify, evaluate and address five types of threats (self-interest threat, self-review threat, advocacy threat, familiarity threat and intimidation threat). The purpose of this study is to determine the level of the exposure to the threats to compliance with the fundamental accounting principles. Another aim of the paper is to find out whether the exposure to these threats is related to gender, age and education level of professional accountants. An online questionnaire was used as a research instrument. Empirical research results indicate that some demographic characteristics such as age and gender are not related to the exposure to the threats. On the other hand, the education level can affect the level of exposure of professional accountants to the threats to compliance with the fundamental accounting principles