Friday, August 24, 2012


On July 31, 2012, the International Ethics Standards Board for Accountants (IESBA) of IFAC has issued the 2012 Handbook of the Code of Ethics for Professional Accountants (the Code).

The 2012 Handbook which effective since January 1, 2011 replaces the 2010 edition of the Handbook of the Code of Ethics for Professional Accountants. No changes of substance of the 2012 edition of the handbook from the previous version. However, editorial amendments have been made.

The issuance of the Code by IESBA is aimed for use by professional accountants around the world. As stated within the Section 100.1 of the Code :

A distinguishing mark of the accountancy profession is its acceptance of the responsibility to act in the public interest. Therefore, a professional accountant’s responsibility is not exclusively to satisfy the needs of an individual client or employer. In acting in the public interest, a professional accountant shall observe and comply with the Code. If a professional accountant is prohibited from complying with certain parts of this Code by law or regulation, the professional accountant shall comply with all other parts of this Code.

The Code contains three parts. PART A establishes the fundamental principles of professional ethics for professional accountants and provides a conceptual framework that professional accountants shall apply to :

  1. Identify threats to compliance with the fundamental principles;
  2. Evaluate the significance of the threats identified; and
  3. Apply safeguards, when necessary, to eliminate the threats or reduce them to an acceptable level. Safeguards are necessary when the professional accountant determines that the threats are not at a level at which a reasonable and informed third party would be likely to conclude, weighing all the specific facts and circumstances available to the professional accountant at that time, that compliance with the fundamental principles is not compromised.

A professional accountant shall use professional judgment in applying this conceptual framework.

PART B and C describe how the conceptual framework applies in certain situations. They provide examples of safeguards that may be appropriate to address threats to compliance with the fundamental principles. They also describe situations where safeguards are not available to address the threats, and consequently, the circumstance or relationship creating the threats shall be avoided.

Part B applies to professional accountants in public practice. While Part C applies to professional accountants in business. Nevertheless, professional accountants in public practice may also find Part C relevant to their particular circumstances.

Download the Code from here : The 2012 Handbook of the Code of Ethics for Professional Accountants

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