ICMAI Unveils New Ethics Code for Members, Mandating Independence and Accountability
New Delhi, India – The Institute of Cost Accountants of India (ICMAI) has released a new “Code of Ethics for the Members of the Institute,” effective June 1, 2025. This comprehensive document, which includes independence standards, aims to reinforce the ethical framework governing Cost and Management Accountants (CMAs) and uphold public trust in the profession. The Code was approved by the Council of the Institute during its 358th meeting.
The ICMAI states that the profession of Cost and Management Accountancy is built on a strong ethical foundation that prioritizes the public interest. The new Code is a reassertion of the Institute’s commitment to these principles, reflecting core values such as integrity, objectivity, professional competence, due care, confidentiality, and professional behavior.
In an evolving business landscape characterized by rapid change, heightened stakeholder expectations, and increased regulatory scrutiny, ethical conduct is presented not just as an ideal but as a necessity. The Code is designed to serve as a guide for CMAs, assisting them in identifying, evaluating, and addressing potential threats to ethical compliance, particularly in maintaining independence during assurance engagements.
A significant aspect of this updated Code is the inclusion of Independence Standards and the adoption of a conceptual framework approach. This framework is intended to empower members to exercise sound professional judgment, demonstrate resilience in the face of ethical challenges, and promote a culture of transparency and accountability. The ICMAI believes that these provisions will support members in diligently fulfilling their responsibilities, whether they are operating in business or public practice.
CMA Bibhuti Bhusan Nayak, President of ICMAI, expressed confidence that the Code will serve as a vital resource for all members, strengthening the trust placed in the CMA profession and ensuring the fraternity collectively upholds the highest standards of ethical conduct.
CMA Ashwin G Dalwadi, Immediate Past President of ICMAI and Chairman of the Cost Auditing and Assurance Standards Board (CAASB), highlighted that the document consolidates the ethical expectations for members and reflects the CMA profession’s dedication to integrity, accountability, and public trust. He noted that the Code aligns with international ethical benchmarks established by the International Federation of Accountants (IFAC) and incorporates relevant provisions for both members in practice and those in business.
The development of this Code involved extensive deliberations, drawing from international best practices and tailored to the Indian regulatory and professional environment. It is intended to function as both a regulatory instrument and a tool for fostering a strong ethical culture within the CMA profession. As a member of IFAC, the ICMAI recognized the imperative to revise its Code of Ethics to align with the International Code of Ethics, adopting a convergence approach.
The CAASB of the Institute spearheaded the task of developing and implementing this new Code of Ethics and Independence Standards. A working group and a Task Force contributed to the drafting process. The draft was discussed by the CAASB and subsequently recommended to the Council for approval. The Council, in its 358th meeting, initially approved the draft and decided to seek public comments. The final Code was then prepared by the Chairman of the CAASB and the President of the Institute, incorporating feedback from members.
The Code is structured into several parts to address various aspects of ethical conduct:
Structure and Application of the Code
Part 1: Complying with the Code, Fundamental Principles and Conceptual Framework This foundational section outlines the fundamental principles of ethics that all CMAs must adhere to. These principles are:
- Integrity: Being straightforward and honest in all professional and business relationships.
- Objectivity: Not allowing bias, conflict of interest, or undue influence of others to override professional or business judgments.
- Professional Competence and Due Care: Maintaining professional knowledge and skill at the level required to ensure that clients or employers receive competent professional service, and acting diligently and in accordance with applicable technical and professional standards.
- Confidentiality: Respecting the confidentiality of information acquired as a result of professional and business relationships and, therefore, not disclosing any such information to third parties without proper and specific authority, unless there is a legal or professional right or duty to disclose.
- Professional Behavior: Complying with relevant laws and regulations and avoiding any conduct that discredits the profession.
This part also introduces a conceptual framework. This framework requires CMAs to identify, evaluate, and address threats to compliance with these fundamental principles. It emphasizes the need for an inquiring mind, sound professional judgment, and the application of a “reasonable and informed third party test” when assessing ethical challenges. The framework acknowledges that existing conditions, policies, and procedures established by the profession, legislation, regulation, or the firm/employing organization can influence the identification and evaluation of threats. When threats are not at an acceptable level, safeguards (actions taken to effectively reduce threats) must be applied.
Part 2: CMAs in Business This section provides additional material specifically applicable to CMAs working in various organizational settings, including commerce, industry, public sector, not-for-profit organizations, and regulatory bodies. It also applies to CMAs in practice when they perform professional activities in their capacity as contractors, employees, or owners within their firm.
Part 3: CMAs in Practice This part sets out supplementary material relevant to CMAs who are providing professional services in public practice.
Independence Standards (Parts 4A and 4B) These sections detail the independence requirements for CMAs providing assurance services. The conceptual framework is applied to identify, evaluate, and address threats to independence in these engagements.
- Part 4A: Independence for Audit and Review Engagements: This part applies specifically when CMAs are performing audit or review engagements.
- Part 4B: Independence for Assurance Engagements Other than Audit and Review Engagements: This part addresses independence for other types of assurance engagements that are not audits or reviews.
The Code also includes a Glossary of defined and described terms, along with abbreviations used throughout the document and in other related standards.
Each section of the Code is structured with an introduction, specific Requirements (R), and Application Material (A). Requirements, typically using the word “shall,” impose obligations on CMAs. The application material provides context, explanations, suggestions, and illustrations to assist CMAs in properly understanding and applying the requirements and the conceptual framework. While the application material does not impose requirements, its consideration is essential for proper compliance.
The ICMAI has made it clear that adherence to this Code requires comprehensive knowledge, understanding, and application of all relevant provisions within the context of the fundamental principles and the conceptual framework. The Institute encourages CMAs and all readers to provide constructive suggestions for future improvements to the document.
