2021 Code of Ethics highlights the importance of ED&I and aligns Part 4B to ISAE 3000
Ann Buttery, Head of Ethics, ICAS Policy Leadership, reports on the changes to the ICAS Code of Ethics which take effect from 1 January 2021.
ICAS is adopting a revised Code of Ethics with effect from 1 January 2021 to incorporate the following changes:
- ICAS Council approved amendments to highlight the importance of CAs respecting values of equality, diversity and inclusion;
- International Ethics Standards Board for Accountants (IESBA) revisions to Part 4B “Independence for assurance engagements other than audit and review engagements” to make the provisions consistent with the International Standard on Assurance Engagements (ISAE) 3000 (Revised).
Equality, diversity and inclusion
Effective 1 January 2021, the following ICAS Council approved changes are incorporated into the ICAS Code of Ethics to make it clear that CAs are required to respect values of equality, diversity and inclusion:
- an addition to the application material in Subsection 111 in relation to the fundamental principle of Integrity;
- an addition to the requirement in Subsection 115 in relation to the fundamental principle of Professional Behaviour; and
- an addition to the application material in Section 200 in relation to organisational culture and Professional Accountants in Business.
To be clear, these amendments to the Code do not represent a change in the substance of the Code. By requiring CAs to adhere to the five fundamental ethics principles, the extant Code already prohibits behaviour by CAs which is contrary to values of equality, diversity and inclusion, even though there is no specific reference within the extant Code to these values.
These changes are being made to the Code to bring attention to values of equality, diversity and inclusion, to highlight that upholding these values is in the spirit of what it means to be a member of ICAS and to emphasise the behaviours expected of individual CAs.
More detailed information is provided here.
Alignment of Part 4B to ISAE 3000 (Revised)
The ICAS Code of Ethics is substantively based on the International Ethics Standards Board for Accountants (IESBA) Code of Ethics. Part 4B of the Code comprises the independence standards for assurance engagements other than audit and review engagements. Paragraph R400.0 B in the ICAS Code of Ethics provides further discussion on the applicability of Part 4B in the UK.
In 2018, IESBA undertook to review Part 4B of the Code to make its "provisions consistent with the revised assurance terms and concepts in the International Auditing and Assurance Standards Board’s (IAASB’s) International Standard on Assurance Engagements (ISAE) 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information."
IESBA published its final pronouncement in January 2020 explaining:
“The main revisions, developed in coordination with the IAASB, include:
- Changes in key terminology, including a revised definition of the term “assurance client”;
- Amendments to certain independence requirements in light of the revised assurance client definition;
- Greater clarity as to the parties to an assurance engagement and their roles and responsibilities, and the related independence requirements that apply; and
- A clearer distinction between the types of assurance engagement covered in Parts 4A (addressing independence for audit and review engagements) and 4B of the Code.”
In July 2020, the FRC announced the UK adoption of ISAE 3000 which is effective for assurance reports dated on or after 15 September 2020.
Part 4B of the 2021 Code relating to independence for assurance engagements with respect to underlying subject matter covering periods is effective for periods beginning on or after 15 June 2021; otherwise, Part 4B of the 2021 Code is effective as of 15 June 2021. Early adoption of Part 4B of the 2021 Code is permitted. Part 4B of the previous version of the Code (applicable from 1 January 2020) continues to be effective prior to 15 June 2021.
ICAS resources
As well as the ICAS Code of Ethics, as part of its The Power of One business ethics initiative, ICAS has published a number of ethics resources to support Members. Search ‘Ethics and The Power of One’.
ICAS offers an Ethics Helpline Service.
ICAS has also partnered with Protect to provide ICAS Members and Students with access to an independent whistleblowing advice helpline. This service offers free advice regarding whistleblowing and speaking up.
