The International Ethics Standards Board for Accountants (IESBA) updated its International Code of Ethics for Professional Accountants on April 9, 2018, to make it easier to use and help accountants address issues of ethics and independence.
The revisions do not change the code’s fundamental principles, but they do alter the code’s framework for addressing ethical issues. The changes also update the information about the safeguards that help accountants respond to threats to their independence.
The IESBA said it strengthened the provisions that address when an auditor has served a client for a long time, clarified the overlapping rules for accountants who work at businesses and those who work in public practice, and added guidance that emphasizes the need for an accountant to tailor her or his professional judgment to the situation at hand.
“The code is now a significantly strengthened platform, reengineered for greater usability while maintaining global applicability. It underscores the importance of the fundamental principles for all professional accountants,” said IESBA Chairman Stavros Thomadakis in a statement. “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.”
The IESBA said the updated code also includes guidance that explains how compliance with the Code of Ethics helps an accountant employ the necessary judgment and professional skepticism. The updated information for professional accountants in business is intended to help them prepare and present information and respond to pressure to breach accounting principles.
Recently, the IESBA launched an initiative to explore the types of services that are permitted within its Code of Ethics. The initiative was begun in response to changes in the global regulations affecting auditors and recommendations from the Public Interest Oversight Board, an international body of regulators that monitors the regulatory environment for the accounting profession. The IESBA said it wanted to determine how to meet the expectations that accountants and auditors will display independence from their clients.
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