- IESBA proposes changes to the International Code of Ethics to promote the role and mindset expected of Professional Accountants
- The proposals highlight a Professional Accountant’s responsibility to act in the public interest and enhance the fundamental principles and conceptual framework by introducing new concepts
- Members should review the proposed changes as they will subsequently impact the NZICA Code of Ethics. Your views should be provided to us by 14 October 2019
The International Ethics Standards Board for Accountants (IESBA) proposes changes to the International Code of Ethics for professional standards Professional Accountants (including International Independence Standards) (International Code) to promote the role and mindset expected of professional accountants.
These proposed changes are detailed in the exposure draft Proposed Revisions to Promote the Role and Mindset Expected of Professional Accountants (the exposure draft) issued on 31 July 2019. A copy of the exposure draft can be found on the IFAC website.
Proposed changes to International Code
The proposed changes primarily affect Part 1 of the International Code. New text is to be added that:
Section 100: Complying with the Code
- Highlights the wide range of roles professional accountants hold due to the skills and values they possess and states that these skills and values ultimately underpin public trust in the profession
- Highlights the importance of professional accountants complying with the Code in order to meet their responsibility to act in the public interest
- Recognises that societal expectations change rapidly, and the black letter of the Code will not always be able to keep up - therefore, professional accountants need to ensure that they comply with the spirit of the Code and not just the black letter of the Code.
Section 110: The Fundamental Principles
- Clarifies that integrity includes acting appropriately when confronting ethical dilemmas including standing one’s ground and challenging others even when it creates potential adverse personal or organisational consequences
- Clarifies, in respect to objectivity, that undue influence can arise from sources other than people i.e. organisations, technology and other factors
- Clarifies, in respect professional competence and due care, that maintaining professional competence includes continuing awareness and an understanding of relevant technology related developments
- Includes a requirement, in respect to professional behavior, to behave in a manner that is consistent with the profession’s responsibility to act in the public interest.
Section 120: The Conceptual Framework
- Expands the existing requirement, when applying the conceptual framework, to remain alert for new information and to changes in facts and circumstances, to an overarching requirement to have an inquiring mind
- Provides new application material on the new concept of an inquiring mind
- Expands the application material on professional judgement to include factors to consider in determining whether it has been exercised in appropriately in the circumstances e.g. bias etc
- Provides new application material on bias including examples of different types of bias
- Provides new application material to emphasise that compliance with the Code is enhanced when the ethical values of an organisation are aligned with the Code.
Impact on NZICA Code of Ethics
The NZICA Code of Ethics (NZICA Code) is based on the International Code. The New Zealand Regulatory Board (NZRB) supplements the International Code with New Zealand specific requirements and guidance only where certain limited modification criteria are satisfied. As a consequence, in the absence of a compelling reason for alteration, it is likely that the proposed changes to the International Code will be replicated unchanged in the NZICA Code.
Therefore, we invite you to review the exposure draft and advise us of any views you have on the changes proposed. In particular, we are interested in whether you consider that New Zealand specific requirements and guidance will be required if the International Code is enacted in its current form. This information will enable us to develop an appropriate response to IESBA and determine the exact nature of the due process procedures needed to effect the consequential changes to the NZICA Code.
Please e-mail your views on the exposure draft to email@example.com by 14 October 2019.
Proposed Revisions to the Code to Promote the Role and Mindset Expected of Professional AccountantsRead more