Code of Ethics
Code of Ethics
Code of Ethics
PARTS APPLICABILITY
Part 1 - Complying with the Code, Applicable to all professional accountants (PA)
Fundamental Principles and Conceptual
Framework
Part 2 – Professional Accountants in Applicable to PAIBs when performing professional
Business (PAIBs) activities.
PAIBs include PAs engaged or contracted in an Also applicable to PAPPs when performing
executive or non-executive capacity in, for example: professional activities pursuant to their relationship
✓ Commerce, industry or service. with the firm, whether as a contractor, employee or
✓ The public sector.
owner.
✓ Education.
✓ The not-for-profit sector.
✓ Regulatory or professional bodies.
Part 3 – Professional Accountants in Applicable to PAPPs when performing professional
Public Practice (PAPPs) activities.
Part 4 – International Independence Part 4A – Independence for Audit and Review
Standards Engagements
Part 4B – Independence for Assurance
Engagements other than Audit and Review
Engagements
FUNDAMENTAL PRINCIPLES
A. INTEGRITY – to be straightforward and honest in all professional and business relationships.
C. PROFESSIONAL COMPETENCE AND DUE CARE – (1) To attain and maintain professional
knowledge and skill at the level required to ensure that a client or employing organization
receives competent professional service; and (2) to act diligently and in accordance with
applicable technical and professional standards.
D. CONFIDENTIALITY – to respect the confidentiality of information acquired as a result of
professional and business relationships and, therefore, not disclose any such information to
third parties without proper and specific authority, unless there is a legal or professional right
or duty to disclose, nor use the information for the personal advantage of the professional
accountant or third parties.
E. PROFESSIONAL BEHAVIOR – To comply with relevant laws and regulations and avoid any
conduct that the professional accountant knows or should know might discredit the
profession.
The environment and circumstances in which a professional accountant renders its services and
activities may create threats to compliance with the fundamental principles as previously
discussed. As such, the conceptual framework has been set out on the code to present
requirements on how to appropriately deal with these threats.
A. SELF-INTEREST THREAT – the threat that a financial or other interest will inappropriately
influence the professional accountant’s judgment or behavior.
B. SELF-REVIEW THREAT –the threat that a professional accountant will not appropriately
evaluate the results of a previous judgment made or service performed by the professional
accountant, or by another individual within the professional accountant’s firm or employing
organization, on which the accountant will rely when forming a judgment as part of providing
a current service.
C. ADVOCACY THREAT – the threat that a professional accountant will promote a client’s or
employer’s position to the point that the professional accountant’s objectivity is compromised.
D. FAMILIARITY THREAT – the threat that due to a long or close relationship with a client or
employer, a professional accountant will be too sympathetic to their interests or too accepting
of their work.
E. INTIMIDATION THREAT – the threat that a professional accountant will be deterred from
acting objectively because of actual or perceived pressures, including attempts to exercise
undue influence over the professional accountant.
Threats identified that are not at an acceptable level must be addressed in one of three ways:
1. Eliminating the circumstances, including interests or relationships, that are creating the
threats;
2. Applying safeguards, where available and capable of being applied, to reduce the threats
to an acceptable level; or
3. Declining or ending the specific professional activity.
SAFEGUARDS THAT MAY ELIMINATE OR REDUCE THREATS
TO AN ACCEPTABLE LEVEL
INDEPENDENCE
Independence of mind
The state of mind that permits the expression of a conclusion without being affected by influences
that compromise professional judgment, thereby allowing an individual to act with integrity, and
exercise objectivity and professional skepticism.
Independence in appearance
The avoidance of facts and circumstances that are so significant that a reasonable and informed
third party would be likely to conclude, weighing all the specific facts and circumstances, that a
firm’s, or a member of the audit or assurance team’s integrity, objectivity or professional
skepticism has been compromised.