Question

In the conceptual framework to the AICPA Code of Professional Conduct, a self-interest threat is:

a. the threat that a CPA could benefit, financially or otherwise, from an interest in, or a relationship with, a client or persons associated with the client.
b. the threat that a CPA will not act with objectivity because the CPA's interests are opposed to the client's interests
c. the threat that a CPA will take on the role of client management or otherwise assume management responsibilities.
d. the threat that a CPA will promote a client's interests or position to the point that the CPA's objectivity or independence is compromised.

Answer 1

A self-interest threat in the AICPA Code of Professional Conduct is the risk that a CPA could benefit from an interest in, or relationship with, a client, leading to a compromise of professional judgment.

Step-by-step explanation:

In the conceptual framework of the AICPA Code of Professional Conduct, a self-interest threat is defined as: the threat that a CPA could benefit, financially or otherwise, from an interest in, or a relationship with, a client or persons associated with the client.

This type of threat arises when there is a potential for personal gain to compromise the professional judgment of a CPA. Situations that may lead to self-interest threats include, but are not limited to, owning stock in a client's company, close relationships with client personnel, or expecting to enter a business venture with a client.

Recognizing and mitigating potential self-interest threats is crucial for maintaining objectivity and the integrity of the accounting profession.