Revised NZ Code of Ethics

More information

• Overview of proposed amendments

  The Code of Ethics is by necessity a complete revision of the extant Code of Ethics as the IESBA has undertaken a full re-write of the International Code of Ethics.

  However, many of the core components of the previous Code of Ethics remain - merely in a rearranged form - including:

  • The fundamental principles (i.e. integrity, objectivity, confidentiality, professional competence and due care, professional behaviour)
  • The threats to compliance with the fundamental principles (i.e. self-interest, self-review, advocacy, familiarity, intimidation)
  • The requirement to be independent when required
  • The requirement to apply the conceptual framework to comply with the fundamental principles (i.e. identify the threat, evaluate the threat and address the threat).

  The amendments to the Code of Ethics can be divided into 4 categories:

  • Restructuring and rewrite (see below)
  • Substantive changes (see below)
  • Guide to the code (see below)
  • New Zealand provisions (see below)
• Restructuring and re-write

  Key features:

  • Principles based but with new structure and clarified language
  • More prominent requirements to comply with the fundamental principles, be independent when appropriate and apply the conceptual framework to identify, evaluate and address threats
  • More robust and clearly distinguished requirements
  • Application material clearly linked to requirements
  • Clarification about responsibilities; avoidance of passive language
  • Topic specific material more closely linked to the conceptual framework is set-out in section 120
  • Incremental provisions that assist in applying the conceptual framework are included in Parts 2 (Members in Business), 3 (Members in Public Practice), 4A and 4B (International Independence Standards).
• Substantive changes

  Key revisions:

  • Significant enhancements to the conceptual framework with emphasis on threats to compliance with the fundamental principles
  • Enhanced safeguard provisions better aligned to threats
  • Improved rules for Members in Business including enhanced provisions relating to preparation and presentation of information and a new section on pressure to breach the fundamental principles
  • Clarification of how some provisions relevant to Members in Business also apply to Members in Public Practice
  • New guidance regarding professional judgement and professional scepticism
  • More extensive inducement provisions.
• Guide to the Code

  The revised Code of Ethics comes with a guide designed to assist new and infrequent users with understanding how to use it.

  For existing members, it will be a useful tool to assist members with "getting to grips" with the re-written Code of Ethics.

• New Zealand provisions

  The NZ specific paragraphs in the previous version of the Code of Ethics were reviewed and amended (or deleted) to update or clarify their intended meaning in light of the changes to the International Code or changes to technical and professional standards or legislation.

  Paragraphs requiring the disclosure and consent of conflicts of interest by members in public practice have been modified to confirm that disclosure and consent should be in writing.  New paragraphs have also been added to encourage all members to document matters relating to conflicts of interest.

  The Code of Ethics has been drafted to ensure it is aligned as far practicable with the Code of Ethics applicable to CA ANZ members resident outside New Zealand: APES 110 Code of Ethics for Professional Accountants (including Independence Standards) issued by the Australian Professional and Ethical Standards Board (APESB). As a result, the revised Code of Ethics includes two new NZ specific paragraphs based on Australian specific paragraphs relating to contingent fees and to referral fees and commissions.

• Provisions that relate solely to assurance practitioners

  Please note that the revised Code of Ethics does not include the provisions that relate solely to assurance practitioners (as indicated in the revised Code of Ethics). Members should instead refer to the recently approved PES 1 for those provisions.

• Submission/Approval process

  1 November 2018	Invitation for comment on Exposure Draft 2018-2:  Proposed Revision of Code of Ethics (ED) (see below).
  8 February 2019	Submissions on the ED closed.
  14 March 2019	NZRB met to consider submissions and management’s report on the submissions (see below). The NZRB approved the revised Code of Ethics (see button on the right or below).
  3 April 2019	Code of Ethics tabled at Parliament as it is a disallowable instrument.
  17 April 2019	Date of issue of revised Code of Ethics.  The revised Code of Ethics is published on this webpage and in the Members Handbook.
  15 June 2019	Effective date of revised Code of Ethics.