_{Note for New Zealand members – while the general information contained in this article is also applicable in New Zealand, the article does not include the NZ specific references to: NZICA Code of Ethics (rather than APES 110) [which includes reference to members in business (instead of professional accounts in business (PAIB)) and members in public practice (instead of professional accountants in public practice (PAPP))]; NZICA professional and ethical standards (instead of APESB).}

Being a chartered accountant opens up a world of career opportunities beyond public practice. And as an accountant working in business, you can play an important role. Perhaps you’re involved in setting up operational and fiduciary controls, providing data for strategic decision making or helping to put risk management processes in place.

But you may face competing pressures as you strive to do your job. A common one may be balancing your management’s desire to post strong financial results with the need to provide transparent and accurate reporting to investors and regulatory bodies. How you collate and report financial information can set the tone for ethical practices within the business.

It’s also important that, as a CA ANZ member, you comply with the Code of Ethics for Professional Accountants, (including Independence Standards) (the Code). If you don’t, you may be disciplined or sanctioned by CA ANZ regardless of what responsibility your employer takes for your actions at work.

What’s in the Code of Ethics  

There are sections of the Code that are especially relevant to CA ANZ members who work in business, or as the Code calls you, a Professional Accountant in Business (PAIBs). 

The Code is made up of four parts:

• Part 1 is about complying with the Code and includes the fundamental principles and conceptual framework – this section applies to all accountants regardless of whether you are a professional accountant in practice (PAPP) or a PAIB.
• Part 2 is for members in business and includes most of the ethics requirements that you must follow.
• Part 3 is for members in public practice.  
• Part 4 contains the independence requirements for audit and review engagements and the independence requirements for assurance engagements other than audit and review engagements. Most of Part 4’s requirements don’t apply if you work in a business, except if you work directly with auditors to complete the audit of the organisation you work for.

Understand your fundamental ethical obligations  

If you’re a PAIB, Parts 1 and 2 are the most relevant to you. Framing the Code as a whole, Part 1 sets out the five fundamental principles and the five threats to these principles. 

The five fundamental principles are: 

• integrity
• objectivity
• confidentiality
• professional competence/due care
• professional behaviour. 

The five threats to these principles are: 

• self-interest
• self-review
• intimidation
• familiarity
• advocacy.

When you face ethical issues, use the conceptual framework in Part 1 (shown above). Identify the threats to the fundamental principles and then, if possible and appropriate, reduce these threats to acceptable level by applying available safeguard or ending the commercial relationship.

You should then use the informed third-party test to determine if the threat level is acceptable. This test asks whether an independent person, understanding all the facts and circumstances, would come to the same decision as you that the threat is acceptable. 

Part 1 of the Code also has guidance on an accountant’s role and the mindset you need to bring to your professional activities.

How the Code helps guide CAs in business   

Part 2 of the Code details what PAIBs need to consider when addressing ethical issues so that the public's trust in financial markets is safeguarded. 

Part 2 includes how to manage conflicts of interest when preparing and presenting financial information. This is important because chartered accountants are often on the front line of making sure that a company’s financial reporting has integrity.

Part 2 also requires you to ensure that you have the expertise required for the work that you take on. 

It also regulates the scenario where you may receive financial compensation or incentives that are linked to how you report the business’s financial position or the information you provide for business decision making.

What's more, Part 2 includes what you are required to do when you are offered gifts, hospitality, incentives or special treatment which may in fact be an inducement to act in a certain way.

You also have an obligation to report any non-compliance or suspected non-compliance with laws and regulations (NOCLAR) by those you work with and not turn a blind eye. 

And finally, Part 2 sets out how to deal with pressure that others place on you to breach the fundamental principles set out in Part 1.

Protecting public trust in financial reporting 

Because chartered accountants in business play an important role in measuring and reporting business value and safeguarding the integrity of capital markets, it’s important that you familiarise yourself with Part 2 of the Code. That way you can understand your professional obligations when working in business. 

Look out for our webinar series on the Code for members in business. The series is accessible from the e-store. 

Where to go for more information

Do you have any further questions or need practical guidance on a complex professional issue? As part of your membership with CA ANZ, you can speak directly to an experienced member of the Professional Standards and Ethics Advisory team. 

Call the CA ANZ Professional Standards and Ethics Advisory Team on 1300 137 322 (Australia) or 0800 4 69422 (NZ) or email us at [email protected].

Or use the online form provided on our contact page.