The NZ Regulatory Board (Regulatory Board) has approved revisions to the NZICA Code of Ethics (NZICA Code) that will apply to New Zealand resident members of Chartered Accountants Australia and New Zealand (CA ANZ) and all other practitioners subject to NZICA jurisdiction effective from 15 December 2024 (early adoption permitted).

The revisions to the NZICA Code are  intended:

• to incorporate recent amendments made by the International Ethics Standards Board for Accountants (IESBA) to the International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code) as reflected in: 
  • Final Pronouncement Technology-related Provisions of the Code, published by the International Federation of Accountants (IFAC) in April 2023 (Technology Project).
  • Final Pronouncement Revisions to the Code Relating to the Definition of Engagement Team and Group Audits, published by IFAC in February 2023 (Engagement Team and Group Audits Project).
  • Final Pronouncement Revisions to the Definitions of Listed Entity and Public Interest Entity, published by IFAC in April 2022 (Definitions of Listed Entity and Public Interest Entity Project).
• to align with recent amendments made by New Zealand Auditing and Assurance Standards Board (NZAuASB) to Professional and Ethical Standard 1, International Code of Ethics for Assurance Practitioners (including International Independence standards) (New Zealand) (PES 1) as a result of the above amendments to the IESBA Code.

Overview of proposals

Substantive changes

The substantive changes made to the NZICA Code arise from IESBA’s Technology Project and are designed to ensure that the Code is robust enough to guide the ethical mindset and behaviour of members as they navigate a landscape of changing technology. 

However, Members should note that many of these changes will apply to all situations (i.e., not just to situations involving technology):  Particular attention should be given to the proposed amendments to the fundamental principle of confidentiality (section 114) which has been re-written and re-arranged to enhance clarity and understanding of its requirements.

New text has been added that:

• Clarifies the fundamental principles of professional competence and due care (subsection 113) and confidentiality (subsection 114) to draw special attention to imperatives of the digital age including: 
  • clarification that professional competence includes appropriate application of all relevant knowledge and skill relevant to the situation (in addition to relevant technical knowledge).
  • a new requirement to provide stakeholders with an explanation of the implications of limitations of professional activities (in addition to simply making those stakeholders aware that those limitations exist).
  • clarification that confidentiality requires the member taking appropriate action to protect the confidentiality of the information over the entire course of its collection, use, transfer, storage or retention, dissemination, and lawful destruction.
  • a new prohibition of the use or disclosure of information in respect of which a duty of confidentiality applies notwithstanding that the information has become publicly available, whether properly or improperly.
  • clarification that the requirement to seek authorisation to use or disclose confidential information includes circumstances where the information is to be used for training purposes, in the development of products or technology, in research or as source material for industry or other benchmarking data or studies (information to be communicated when obtaining this authorisation is requested is also discussed).
• Enhances the conceptual framework (section 120) to highlight considerations relating to complex circumstances that may be inherent in technological developments and the need for ethical leadership.
• Adds new requirements and application material to sections 200 (applying the conceptual framework – members in business), 220 (preparation and presentation of information), 300 (applying the conceptual framework – members in public practice) and 320 (professional appointments) to address the ethical dimension of members’ reliance on, or use of, the output of technology.
• Adds a new definition of “confidential information” to the glossary.

Members should refer to the Invitation to Comment (ITC) (see below) for more details of how these amendments impact the NZICA Code.

Conforming amendments

The Technology Project also made substantive changes to Parts 4A and 4B (independence standards) of the IESBA Code.  However, as members who are assurance practitioners are required to comply with both PES 1 and the NZICA Code, Parts 4A and 4B are not replicated in the NZICA Code and instead members are referred to Parts 4A and 4B of PES 1.

In June 2023, the NZAuASB released an amending standard Amendments to Professional and Ethical Standard 1: Technology-related Revisions that is designed to incorporate amendments arising from the Technology Project into PES 1. These amendments to PES 1 will apply from 15 December 2024.

Similarly, the Engagement Team and Group Audits Project and the Definitions of Listed Entity and Public Interest Entity Project also made substantive changes to Parts 4A and 4B (independence standards) of the IESBA Code (and only consequential changes to Parts 1, 2, 3).

In November 2022, the NZAuASB has released an amending standard Amendments to Professional and Ethical Standard 1:  Revisions to the Definition of Public Interest Entity that is designed to incorporate the relevant amendments arising from the definitions of listed entity and public interest entity project into PES 1. These amendments to PES 1 will apply from 15 December 2024.

In addition, in June 2023, the NZAuASB has released an amending standard Amendments to Professional and Ethical Standard 1:  Revisions to the Definition of Engagement Team and Group Audits that is designed to incorporate amendments arising from the engagement team and group audits project into PES 1. These amendments to PES 1 will apply from 15 December 2023.

Members should refer to the ITC (see below) for details of how these amendments impact the NZICA Code including how assurance practitioners should approach the mismatch of effective dates for the amendments arising from the Engagement Team and Group Audits Project.

Submissions / approval process