Acca aaa s21 Notes

eliminate
the source of the threat or 
decline
/end the activity. 
The ACCA Code of Ethics (2019) defines safeguards as "
actions
, individually or in combination, taken 
by the 
professional accountant
that effectively eliminate threats to compliance with the 
fundamental principles or reduce them to an 
acceptable level
".
The ‘test’ of what is acceptable is whether a “reasonable and well informed party… would be likely to 
conclude that … compliance with the fundamental principles is not compromised”. 
Although the Code is ‘principles-based’, that does not mean that ‘anything goes’ (ie nothing is 
actually prohibited). Some threats are considered ‘too significant’ that no safeguards could reduce the 
threats to an acceptable level.
September 2021 to June 2022 exams
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Example 1 – No safeguards
State FIVE threats which NO safeguards could reduce to an acceptable level.
Example 2 – Safeguards to reduce threat to an acceptable level
State FIVE safeguards that may be applied to reduce a threat to an acceptable level.
For each, safeguard, give one example of its application.
Note that the concepts of broader safeguards (“created by the profession”, “in the work environment”, 
“implemented by the entity”) are 
not
now regarded as safeguards. 
These “no longer safeguards” may, however, affect the evaluation of a threat. For example, “seeking 
advice” does not meet the definition of a safeguard but may assist in assessing a complex matter.
A professional accountant’s action is not a safeguard unless it is