ICAS code of ethics

The ICAS Code of Ethics is being updated. The revised Code of Ethics applies from 1 November 2017 and replaces the previous version (applicable from 1 January 2014). The 2017 revisions are highlighted below.

(Parts A to C) applicable to 31 October 2017

View the Code of Ethics

(Parts A to C) applicable from 1 November 2017

View the Code of Ethics

Part D of the Code applies to insolvency practitioners.

The ICAS Code of Ethics (the "Code") applies to all members of ICAS, affiliates, students, employees of a member firm or an affiliate, and member firms where relevant. These are referred to in the Code as "professional accountants".

Professional accountants have a responsibility to take into consideration the public interest and to maintain the reputation of the accountancy profession. Personal self-interest must not prevail over those duties.

The Code helps professional accountants to meet these obligations by providing them with ethical guidance. Failure to follow this Code may lead to a professional accountant becoming liable to disciplinary action as outlined in Chapter 13 of the ICAS Rules.

Conflict of interest guidance

ICAS has issued new guidance on conflict of interest (March 2019) providing details of best practice on how to apply the existing provisions on conflict of interest within the ICAS Code of Ethics.

2017 revisions to the Code

The ICAS Code of Ethics is largely based on the International Ethics Standards Board for Accountants (IESBA) Code. The revisions to the Code which have been approved by Council and apply from 1 November 2017 are:

1.  Non-compliance with laws and regulations (NOCLAR)

The introduction of the IESBA content on what a professional accountant should do if they encounter actual or suspected “Non-Compliance with laws and Regulations (NOCLAR)” at their client or employer (new Sections 225 and 360 of the Code respectively).

Laws and Regulations

The laws and regulations which are relevant to the professional accountant for the purposes of the NOCLAR guidance are those which have a direct impact on material items in the financial statements, or are fundamental to the organisation’s operations.

The NOCLAR provisions in the Code do not take precedence over local laws and regulations regarding the reporting of actual or suspected non-compliance with laws and regulations. If there is a conflict between local legislation and the provisions of the Code, the professional accountant must adhere to local legislation. Therefore, CAs must always be aware of the disclosures that could amount to “tipping-off” under the UK Anti-Money Laundering laws and regulations.

NOCLAR framework

The underlying principle of NOCLAR is the same for all professional accountants i.e. they should respond to an issue and not turn a blind eye. However, NOCLAR has different requirements depending on the particular role and level of seniority of the professional accountant. Four categories of professional accountant are distinguished and specific steps are identified for each. The classifications are:

  • Auditors.
  • Other Professional Accountants in Public Practice (PAPP).
  • Senior-level Professional Accountants In Business (PAIB).
  • Other Professional Accountants In Business.

Greater responsibility is placed on auditors and senior-level professional accountants in business.

Further guidance on implementing NOCLAR is available via the IESBA website.

2.  Moral courage

An amendment to Section 100.5 of the ICAS Code to establish that “Moral Courage” is an enabler – an underpinning qualitative characteristic -  which helps CAs to comply with the fundamental principles:

Moral courage

"In order to ensure compliance with the fundamental principles, an underpinning qualitative characteristic required of the professional accountant is the ‘courage’ to act morally. ‘Courage’ for the professional accountant is the need to act in accordance with the fundamental principles, especially in situations where there is a risk of suffering adverse personal consequences.

"There is a need for the professional accountant to confront ethical dilemmas with courage. When facing an ethical dilemma, the professional accountant needs to have the courage to acknowledge the dilemma, to make a reasoned judgement as to the ethical action required to resolve the dilemma, and then to act accordingly."

Further information is available here.

3. Other conforming amendments

There are also certain other conforming amendments which are not seen as substantial.

Structure of the Code

The ICAS Code of Ethics has been updated as noted above.

Part D of the Code applies to insolvency practitioners. The revisions made in 2014 in relation to Part D are highlighted below.

The Code establishes the five fundamental principles of professional ethics for all professional accountants:

  1. Integrity
  2. Objectivity
  3. Professional competence and due care
  4. Confidentiality
  5. Professional behaviour

It provides a conceptual framework that professional accountants shall apply to ensure adherence to these fundamental principles.

This conceptual framework requires professional accountants to use their professional judgement to identify and evaluate threats to compliance with the fundamental principles, and then apply safeguards to eliminate the threats, or reduce them to an acceptable level.

For convenience, the Code is split into four sections; however, any of them may be useful in relevant circumstances:

  • Part A applies to all members.
  • Part B applies to members in practice.
  • Part C applies to members in business.
  • Part D applies to insolvency practitioners.

Ethical Standard for Auditors

Auditors undertaking an audit in the UK are required to comply with the requirements of the Financial Reporting Council's 2016 Ethical Standard which became effective on 17 June 2016.

Exercising a right of lien helpsheet

A lien help sheet is available in the regulation section of icas.com. This helpsheet aims to provide guidance to Members in practice on the exercise of a right to lien, highlighting the practical and ethical issues which need to be considered.

2014 revisions to the Code

The following revisions to the Code applied from 1 January 2014:

  1. Section 241 of the Code 'Agencies and Referrals' has been revised to reflect the changes made in respect of independent and restricted advice re referring work to financial advisers. Further information is available on the FCA website.

  2. At sections 110 and 320 of the Code, a statement has been included to reflect the legislative change which states that accounts of micro-entities will satisfy the true and fair review requirement if they contain the information specified by the 'The Small Company (Micro-Entities' Accounts) Regulations 2013'. Therefore, there is a possibility that accounts could be deemed to be 'true and fair' but also misleading. Therefore, for the avoidance of doubt the following statement has been inserted:
    "In relation to accounts prepared under 'The Small Companies (Micro-Entities' Accounts) Regulations 2013', accounts which satisfy the 'true and fair' view requirement of this Statutory Instrument cannot be held to be misleading."

  3. References to various regulatory bodies have been updated.

  4. In Part D of the Code, which relates to Insolvency Practitioners, the only revision is that the Joint Insolvency Committee has removed the second sentence of paragraph 400.3 following a recent decision. This is illustrated below. The text included in bold has been removed from the Code.

    400.3 It is this Code, and the spirit that underlies it, that governs the conduct of Insolvency Practitioners. Failure to observe this Code may not, of itself, constitute professional misconduct, but will be taken into account in assessing the conduct of an Insolvency Practitioner.


  • ICAS Code of Ethics

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