IESBA issues guidance on the ethical implications of emerging technologies

The staff of the International Ethics Standards Board for Accountants (IESBA) have issued guidance for professional accountants on emerging technologies called ‘A characteristics-based approach to ethical considerations for professional accountants. This is to support them as use of such technologies in practice and business becomes more common.

The guidance provides an overview of the ethical implications of emerging technologies commonly used across the accountancy profession, including artificial AI, distributed ledger technologies such as blockchain, machine learning, quantum computing, and robotic process automation. It takes a characteristics-based approach designed to remain relevant as technologies continue to evolve. 

Emerging technologies often work in very different ways from traditional rules-based technologies. Supported by developments in chip technology, they can now operate at a scale and speed that provide a challenge to human oversight. This means professional accountants have to develop a deeper understanding of how such characteristics impact their professional and ethical responsibilities.  

The guidance considers how emerging technologies may lead to circumstances that create or amplify threats to compliance with the fundamental ethics principles, due to the characteristics associated with those technologies. It recognises that, while technologies develop rapidly, the characteristics that matter when considering ethical risks remain relatively consistent over time.

Several common characteristics are covered by the guidance such as opacity, non-determinism, data dependence, adaptivity, autonomy, scalability and speed. It highlights that professional accountants (PAs) are required to apply the Code’s conceptual framework, have an inquiring mind and exercise professional judgement. The guidance also emphasises the need for human oversight over technology-driven outputs. Regardless of the level of automation or technological sophistication, PAs still remain responsible for their judgements and decisions.  

The guidance also stresses the importance of professional competence and due care, which requires an ongoing commitment to continuous learning and the development of appropriate technological understanding. A PA is expected to have, or obtain, a sufficient understanding of the technology to evaluate whether its use is appropriate and whether reliance may be placed on its outputs. The PA’s attention is also drawn to the increased fraud risks that emerging technologies present and the need to keep up to date with the evolving regulatory environment relating to such technologies. 
 
The importance of adaptability, continuous learning and a strong ethical foundation is emphasised to ensure that technological advancement supports, rather than undermines, the integrity of, and public trust, in the profession.

Further resources

IESBA has created a technology focus hub which provides a centralised source for various IESBA related technology publications.

Read this IESBA guidance to help towards meeting your mandatory one hour of Ethics CPD.

Find out more about the ethics resources ICAS provides to support its members: