At step 5 when a CPA confronts threats to ethical decision-making and the safeguards applied to reduce the threat, what is the suggested best practice?

Question

Quizplus · Accepted Answer

When a CPA confronts threats to ethical decision-making and the safeguards applied to reduce the threat, the best practice is to document the identified threats, document the safeguards applied, and document the CPA's evaluation of the effectiveness of the safeguards. This will help the CPA to demonstrate due diligence in their decision-making process and provide evidence for any future review or investigation. It is important to evaluate the effectiveness of the safeguards to ensure that they are sufficient to reduce the threat to an acceptable level. Simply increasing the fee or concluding that the threats are at an acceptable level without proper evaluation and documentation is not appropriate. Contacting the FBI or offering the engagement to a competitor is also unnecessary and may cause unnecessary harm to the client's reputation.

At Step 5 When a CPA Confronts Threats to Ethical