ACCOUNTING

Revamped Code of Ethics Released for Professional Accountants

The International Ethics Standards Board for Accountants recently released a completely rewritten Code of Ethics for Professional Accountants, which will become effective in June 2019.

“Beyond the new structure, the code brings together key ethics advances over the past four years, and is clearer about how accountants should deal with ethics and independence issues,” said the standards board.

Stakeholders can now access the new Code on the IESBA’s website, where implementation resources and other supporting materials will be released throughout the period leading up to the effective date, it added.

While the fundamental principles of ethics have not changed, major revisions have been made to the unifying conceptual framework—the approach used by all professional accountants to identify, evaluate and address threats to compliance with the fundamental principles and, where applicable, independence, the board noted.

New code highlights include:

  • revised “safeguards” provisions better aligned to threats to compliance with the fundamental principless
  • stronger independence provisions regarding long association of personnel with audit clients
  • new and revised sections dedicated to professional accountants in business (PAIBs) relating to the preparation and presentation of information as well as pressure to breach the fundamental principles
  • clear guidance for accountants in public practice that relevant PAIB provisions are applicable to them
  • new guidance to emphasize the importance of understanding facts and circumstances when exercising professional judgment
  • new guidance to explain how compliance with the fundamental principles supports the exercise of professional skepticism in an audit or other assurance engagements

“The code is re-engineered for greater usability while maintaining global applicability. It underscores the importance of the fundamental principles for all professional accountants,” said IESBA Chairman Stavros Thomadakis. “Critical work begins now within firms, national standards setters, regulators and audit oversight bodies, educators, IFAC member bodies and others to promote awareness of the code, and support its adoption and implementation.”

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