ICAS publishes revised Code of Ethics effective from 1 January 2025
Our Code of Ethics is integral to cultivating trust and upholding high standards in the accountancy profession. ICAS' Head of Ethics, Ann Buttery, explains what you need to know about the changes to the ICAS Code of Ethics taking effect from 1 January 2025.
Our Code of Ethics is substantively based on the International Ethics Standards Board for Accountants (IESBA) Code of Ethics. We're bringing in a revised Code of Ethics with effect from 1 January 2025 to incorporate various IESBA revisions to the Code. This includes technology-related changes to the fundamental principle of confidentiality and a revised definition of a public interest entity and listed entity.
IESBA revisions to the Code
Technology-related changes to the Code
The IESBA has revised its Code to respond to the impact of rapid technological advancements and accelerating digitalisation. The revisions refer to the generic term “technology” to help future proof their relevance, but consideration was given to developments in AI.
The revisions:
- Strengthen the code in guiding the mindset and behaviour of professional accountants (PAs) when using any technology.
- Provide enhanced guidance fit for the digital age in relation to the fundamental principles of confidentiality, and professional competence and due care, as well as in dealing with circumstances of complexity;
- Address the circumstances in which firms and network firms may or may not provide a technology-related non-assurance service to an audit or assurance client.
Further information on the key technology-related changes is provided here.
A revised definition of public interest entity and listed entity
The Code has also been revised to include an expanded definition of ‘public interest entity’ (PIE) by specifying a broader list of PIE categories, including a new category ‘publicly traded entity’ which replaces the category ‘listed entity’.
It is the government and the Financial Reporting Council (FRC) who determine what a PIE is in the UK. The current definition of a PIE is likely to be reviewed following the inclusion of the Draft Audit Reform and Corporate Governance Bill in the King’s Speech in July 2024.
IESBA’s new provisions in relation to PIEs primarily impact the International Independence Standards (Part 4A and 4B) of the Code, although reference is also made to PIEs and publicly traded entities in other Parts of the Code. Auditors undertaking an audit in the UK, and professional accountants undertaking other public interest assurance engagements in compliance with the engagement standards issued by the FRC, are required to comply with the requirements of the FRC’s Ethical Standard and there is no requirement to also have to comply with Part 4A of the Code. Detailed explanation is provided in Section 400 of the ICAS Code of Ethics.
In January 2024, the FRC published its Revised Ethical Standard 2024, which becomes effective from 15 December 2024. More information on the revisions to the FRC’s Ethical Standard is provided here.
Other revisions to the Code
Since the publication of the 2022 ICAS Code of Ethics, IESBA has also made a number of other revisions to the Code, mainly to the International Independence Standards (Parts 4A and 4B). However, as noted above, as auditors undertaking an audit in the UK are required to comply with the FRC’s Ethical Standard there is no requirement to also comply with Part 4A of the IESBA Code.
The revisions are in relation to the following areas:
- Non-Assurance Services Provisions
- Fee-Related Provisions
- Objectivity of an Engagement Quality Reviewer and Other Appropriate Reviewers
- Quality Management-Related Conforming Amendments to the Code
- Engagement Team – Group Audit Independence
Find out more about the ethics resources ICAS provides to support its members here.
