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April 13, 2018

Global Ethics Board rewrites Code of Ethics

The International Ethics Standards Board for Accountants (IESBA) has rewritten its Code of Ethics for Professional Accountants.

Alongside the restructuring, the Code takes into consideration the advances in ethics over the last four years. Revisions have been made to the conceptual framework in order to make it easier for accountants to follow.

There have been a number of additions to the framework as well as updates and revisions to the current guidance.

In the new Code, a revision of “safeguard” provisions better aligned to threats to compliance with the fundamental principles.

There has been new guidance added to increase independence provisions regarding long association of personnel with audit clients.

Emphasis has been given to highlight the importance of understanding facts and circumstances when exercising professional judgment.

There is additional guidance to explain how compliance with the fundamental principles supports the exercise of professional scepticism in an audit or other assurance engagements.

The Code has been renamed the International Code of Ethics for Professional Accountants (including International Independence Standards), and will become effective in June 2019 but earlier implementation preparations has been encouraged. 

IESBA chairman Stavros Thomadakis said: “The Code is now a significantly strengthened platform, re-engineered for greater usability while maintaining global applicability. It underscores the importance of the fundamental principles for all professional accountants.

“Critical work begins now within firms, national standards setters, regulators and audit oversight bodies, educators, IFAC member bodies and others to promote awareness of the Code, and support its adoption and implementation.”

IESBA’s multi-stakeholder Consultative Advisory Group (CAG) chair Kristian Koktvedgaard commented: “I congratulate the IESBA on this significant achievement. A strong international Code of Ethics is one of the defining characteristics of the global accountancy profession.

“Clearer, more usable and enforceable independence and ethics standards are essential to public trust in the profession. The new Code establishes a solid base for “future-ready” ethics standards, and I am pleased that the CAG contributed to its development.”

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