Threats in The Enforcement of Accountant's Code of Ethics

The Indonesian Accountants Code of Ethics is the foundation for accountants in carrying out their professional duties, prioritizing the public interest, honesty, integrity, and professional competence. Threats to adherence to the code of ethics often arise when accountants perform their professional duties, such as in the preparation of financial statements, audits, or providing financial advice to clients.

Pressure from interested parties often encourages accountants to deviate from professional and ethical standards for the benefit of certain parties. These threats can arise in various work environments, both in the public and private sectors. Threats to the enforcement of the code of ethics usually occur due to economic pressure or the desire to achieve favorable results for a particular company or client. An overly close relationship between the accountant and the client can also affect the accountant's independence and ability to remain objective.

 In 2021, the Indonesian Institute of Accountants (IAI) released a new code of ethics that provides guidance to ensure that accountants continue to operate within the boundaries of high professionalism. However, there are several threats that can interfere with the enforcement of this code of ethics.  Here are some of the major threats that accountants face in maintaining compliance with the code of ethics.

1. Threat of Personal Interest
This threat occurs when accountants have personal interests that can affect objectivity in carrying out their duties. For example, when an accountant has a personal financial interest related to his client, this can trigger a conflict of interest that interferes with integrity and objectivity.

2. Threat of Personal Review
The threat of personal review arises when an accountant is involved in evaluating decisions or actions they have taken previously. This can happen in cases where accountants review their own work or the work done by their colleagues in the same company. As a result, objectivity in providing judgment may be compromised.

3. Advocacy Threat
The advocacy threat arises when the accountant takes on the role of excessively supporting the client's position or interests. In this situation, the accountant may lose his objectivity because he is too inclined to support the client, which may affect the decision or recommendation given.

4. Proximity Threat
This threat arises when there is too close a relationship between the accountant and the client or other business partners. Close relationships can cause accountants to be more sympathetic or take for granted the information provided by clients, without conducting a critical evaluation. This can certainly reduce the level of independence in carrying out duties.

5. Intimidation Threats
Bullying threats occur when accountants face pressure from internal or external parties to change their professional opinions. This pressure can come in the form of threats to career, reputation, or even physical threats. This intimidation can seriously affect objectivity and integrity in professional decision-making.

Enforcing an accountant's code of ethics is a task that requires a commitment to integrity and objectivity. Threats to adherence to the code of ethics can come from many directions, including conflicts of interest, external pressures, or too close a relationship with clients. Accountants must therefore be able to identify and evaluate these threats, and take appropriate steps to ensure that ethical standards are maintained. Thus, the credibility of the accounting profession and public trust in accountants can be maintained.