Code of ethiCs
A new era for ethics?
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We explore the conceptual framework of the new International Code of Ethics for Professional Accountants and how this will impact practitioners.
s all practising accountants will be aware, the last few years have not been easy for the reputation of our profession. In the UK, the collapse of Carillion Plc was followed by months of media comment and a government Select Committee report into the corporate failure. This lack of confidence in the ethics of accounting firms has driven the review of the functioning of the audit market and may see some substantial changes to audit practices over the next few years. This focus on the conduct of auditing firms is by no means limited to isolated cases of Big Four audits of public interest entities (PIEs) causing concern – and the problems relate to audits throughout the world. It is against this evidence of concerns over the quality of accounting ethics that the new International Code of Ethics for Professional Accountants was published last year, coming into force on 15 June 2019. But does this affect you if you are working as an accountant in business preparing reports and supporting your organisation? Or if you are providing accountancy and assurance services to smaller entities not classed as public interest? And if you are studying
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A lack of confidence in the ethics of accounting firms has driven the review of the audit market and may see some substantial changes to audit practices.”
to be a member of the Association of International Accountants what do you need to know? Jules and Erskine (2018) published a very useful overview of the key areas of focus for practitioners in SMEs and SMPs. This highlights that: “The fundamental principles within the Code – integrity, objectivity, professional competence and due care, confidentiality and professional behaviour – establish the standard of behaviour expected of a professional accountant (PA) and it reflects the profession’s recognition of its public interest responsibility. Those fundamental principles, as well as the categories of threats to them – self-review, self-interest, advocacy, familiarity and intimidation threats – are unchanged. Also unchanged are the overarching requirements to apply the conceptual framework to comply with the fundamental principles and, where applicable, be independent.” This may mean that a headline scan of the Code may lull one into a false sense of confidence, believing that fundamentally nothing has changed – leading to a business as usual approach to ethics in practice which is not the intent of the new provisions!
ISSUE 106 | AIAWORLDWIDE.COM
