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New Code of Ethics for insolvency practitioners published

Steven Wood By Steven Wood, Practice Support Specialist (Insolvency)

2 March 2020

ICAS has published Part 5 of the 2020 revised and restructured Code of Ethics.

ICAS adopted a new revised and restructured Code of Ethics (the Code) with effect from 1 January 2020. This replaced the previous version (applicable from 1 November 2017 to 31 December 2019).

However, Part 5 – applicable to Insolvency Practitioners – was not published at the same time as Parts 1 to 4 of the Code. Part 5 has now been issued with an effective commencement date of 1 May 2020. Part D of the former Code (applicable from 1 January 2014) will continue to apply until that date, although earlier adoption of Part 5 is possible and encouraged.

The Code has been updated following consultation and the structure is substantively based on the revised and restructured International Ethics Standards Board for Accountants (IESBA) Code of Ethics. IESBA’s intention behind this restructuring of the Code was not to fundamentally change the substance of the Code, but to improve its clarity thereby making it more user-friendly.

What has changed?

Some of the main changes to the Code are:

  • The new format differentiates between requirements (identified by an ‘R’) and application material (identified by an ‘A’).
  • There is an entirely new section on the insolvency practitioner as an employee, which emphasises that an insolvency practitioner is required to comply with the Insolvency Code of Ethics irrespective of their status within a firm.
  • The sections on obtaining specialist advice and services, agencies and referrals, referral fees and commission and inducements have all been expanded.
  • There is a new section on responding to non-compliance with laws and regulations based on IESBA material.
  • There are new examples specific to the Republic of Ireland.

Although the Code has a different look to it, the fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour remain as its key concepts.