i) Self-interest and self-review threat:
KK faces a self-interest threat because he is a beneficiary of the reduced interest charged. Also, being a member of the loan committee, he finds himself in a situation where he would be reviewing his own committee’s decisions and hence, is faced with a self-review threat. To address this threat, KK should advise the accounts officer to charge the correct interest rate and arrange for a different person to review the loan aspects of the draft accounts.

ii) Advocacy threat:
As KK is part of those advocating for a separate set of accounts to be opened for the loans, he may become too defensive of the union’s position. To address such risk, he should be seen as providing only impartial and neutral advice in this respect.

iii) Familiarity threat:
KK faces a familiarity threat to integrity – not ensuring that the accounts receivables balance reflects the true amount – due to his close association with the owner of Sede Ltd. KK should advise that the correct figure of receivables be included in the accounts.

iv) Intimidation threat:
KK is faced with an intimidation threat as he works under a domineering CEO. As a safeguard, KK should advise the CEO himself or discuss the anomaly with a relevant board committee, internal audit, non-executive directors, or the board chairperson to ensure that the imprest is properly accounted for.