The NZICA Council has approved for issue the Code of Ethics
(Revised), the withdrawal of the Code of Ethics: Independence in
Assurance Engagements and consequential amendments to the professional
engagement standards, effective 1 January 2014.
The revisions are based on the International Federation of Accountants (IFAC) Code with certain additions for the New Zealand environment. This revision will also more closely align NZICA’s Code of Ethics with the
New Zealand Auditing and Assurance Standards Board’s (NZAuASB) PES 1 (Revised) Code of Ethics for Assurance Practitioners, also effective 1 January 2014.
Respondents to the Invitation to Comment and Exposure Draft released in March were generally supportive of the approach taken and the revisions proposed. The salient theme from submissions was that the impact of the proposed code is not likely to be significant. It is not envisaged that firms will be required to undertake significant systems or process changes. However, firms should still review their quality control procedures and manuals in light of the revised Code for any amendments or updates that may be required.
The most noticeable change is to the structure of the ethical requirements. The requirements look different, but in most instances are substantively the same. The extant Code takes a rules and application guidance approach, whereas the revised Code uses a threats and safeguards model. Assurance practitioners must comply with both PES 1 and NZICA’s Code of Ethics. For this reason, sections 290 and 291 that govern the independence requirements of assurance practitioners are not replicated in NZICA’s Code of Ethics; instead members are directly referred to PES 1 for these sections.
The revised Code is available on the NZICA website now, along with a summary of the differences between the extant Code and the revised Code.
The revisions are based on the International Federation of Accountants (IFAC) Code with certain additions for the New Zealand environment. This revision will also more closely align NZICA’s Code of Ethics with the
New Zealand Auditing and Assurance Standards Board’s (NZAuASB) PES 1 (Revised) Code of Ethics for Assurance Practitioners, also effective 1 January 2014.
Respondents to the Invitation to Comment and Exposure Draft released in March were generally supportive of the approach taken and the revisions proposed. The salient theme from submissions was that the impact of the proposed code is not likely to be significant. It is not envisaged that firms will be required to undertake significant systems or process changes. However, firms should still review their quality control procedures and manuals in light of the revised Code for any amendments or updates that may be required.
The most noticeable change is to the structure of the ethical requirements. The requirements look different, but in most instances are substantively the same. The extant Code takes a rules and application guidance approach, whereas the revised Code uses a threats and safeguards model. Assurance practitioners must comply with both PES 1 and NZICA’s Code of Ethics. For this reason, sections 290 and 291 that govern the independence requirements of assurance practitioners are not replicated in NZICA’s Code of Ethics; instead members are directly referred to PES 1 for these sections.
The revised Code is available on the NZICA website now, along with a summary of the differences between the extant Code and the revised Code.
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