Most of us would agree that it is ethics in practice that makes sense; just having it carefully drafted and redrafted in books may not serve the purpose it is for. Of course all of us want that any profession should be equally beneficial to society and its stakeholders. Every professional ethic in the world requires a high toned morality and integrity. It considers the rightness and wrongness of man’s conduct. It is a source of justifiable pride of a professional to consider the great role performed by him/her to contribute in the development of nation. For that to happen the Institution need to abide by ethics and rule of law, engage themselves in fair practices and competition; all of which would benefit the clients, service provider and the society in whole.
Unlike the other professionals Chartered Accountants contribute to the core of growing businesses be it small or big. It has been one of the most sought after professions in India. Much of the reputation of CAs are due to the rigorous training (both theoretical and practical) makes them practically jack of all trades as the domain of finance is concerned. In spite of the sea change in global trade systems and practices, the requirement of CAs has been remained steady. Because of which the ethical behavior and its responsibilities are becoming more intact to this profession. ICAI has issued the revised 12th edition of a 3 volume Code of Ethics which has come into effect from 1st July; 2020.The ethics in contemporary terms is not a domain that has to be separate from the practical world. It should become a habit that should be inculcated in the behavior of professionals to manage their temperaments and should be strong enough to withstand any selfish motives. The ethics for the Chartered Accountants have, therefore been codified as ethical compliance has always been the philosophy of profession. The members of the institute, whether in practice or in service, are required to comply with the Code of Ethics. With the ever dynamic business environment and increasing complexities and compliances, the ethical dilemma faced by an accountant is different from that faced by him a decade ago. Accordingly, it became imperative to revise the ethical framework for chartered accountants to keep pace with the changing dynamics of the profession.
Today, the members of the institute are not restricted by geographical & demographical limitations. They have professional assignments within the country as well as international assignments; even in the domestic domain they have international clients and international perspectives. There is no denying of the fact that the members have to keep abreast of what are the latest professional developments within the domestic periphery as well as the whole global economic scenario which becomes a hard nut to crack. International Ethics of Standard Body of Accountants (IESBA) which has been known for the setting professional ethics by facilitating the convergence of national and international practices, thereby enhancing the quality and uniformity of practice throughout the world and strengthening public confidence in the global auditing and assurance profession.
While the revised Code retains the fundamental ethical principles from the earlier code, it covers refreshed approach and contains certain new substantially revised requirements. The part shown in requirements establish general and specific obligations to be complied with by the members, while the application material provides the context, explanations, suggestions or actions, illustrations and other guidance to assist in complying with the other requirements.
Some of the new requirements & their importance include:
In particular during the course of professional discharge of duties the auditor may come across the non-compliance of laws and regulations committed or about to be committed by client or the employer or those charged with governance or management. Recognizing that such a situation may be difficult for an accountant, it prima facie becomes the responsibility of the auditor to fulfill the ethical requirements.
Ethics is a state of mind, and there may be some act which, though it may not strictly fall under one of the items mentioned above because it strictly depends upon individuals. In the larger interest of Institute, the council exhorts all members to search their hearts and conscience whenever in doubt, and thereby assist in the maintenance of high principles of professional conduct. It will ensure the progress of our institute to emerge as a global Financial and Assurance leader.
In the end I would like to conclude that, “The ethical aspects of doing business are becoming just as important as the financial ones, and a well- thought- out code of ethics is emerging as a necessary prerequisite for success.”