Date posted: 14/01/2020 5 min read

A restructured Code of Ethics for the real world

An easier to use and more helpful Code of Ethics applies to the Australian accounting profession from 1 January 2020.

In Brief

  • The updated APESB Code harmonises with the International Ethics Standards Board for Accountants.
  • It includes Australia-specific requirements and guidance paragraphs.
  • The updated Code is effective for accountants in Australia from 1 January 2020.

A Code of Ethics is the hallmark of any profession. It provides a robust framework for members to integrate ethical considerations into their decision-making. For the accounting profession, a Code of Ethics is more important than ever, as we witness an erosion of public trust in governments, big business and financial institutions.

In Australia, there have been royal commissions into the banking and aged-care industries, and a parliamentary inquiry into the audit profession. In the UK, there was the Brydon Review into audit, sparked by the collapse of the Carillion construction company with liabilities of £7 billion.

The Accounting Professional & Ethical Standards Board (APESB) issued its updated Code of Ethics for Professional Accountants (APES 110) in November 2018, and it will be effective from 1 January 2020.

It harmonises with the Code released by the International Ethics Standards Board for Accountants and also has Australia-specific requirements and guidance paragraphs (prefixed with AUST).

The Code’s five fundamental principles – integrity, objectivity, professional competence and due care, confidentiality and professional behaviour – have not changed, but the restructured Code uses language that is stronger and more direct.

The following are some of the more important changes to be aware of now that the restructured Code has commenced.

A code that’s easier to use

The restructured Code includes a guide that explains its purpose and structure, how to use the Code, and how it relates to other APESB pronouncements. Mandatory requirements are now separated from related guidance. The restructured Code is also easier to use and navigate with the inclusion of interactive PDF features, including dynamic links and pop-up definitions.

A systematic approach to address ethical issues

The restructured Code establishes an enhanced conceptual framework that provides members with a systematic approach to identifying, evaluating and addressing threats to the five fundamental ethical principles.

This framework helps members address ethical dilemmas by eliminating the circumstances or relationships creating the dilemma or applying relevant safeguards to deal with the threat. If neither of those measures adequately addresses the threat, the member may need to avoid or end the specific professional activity.

The conceptual framework requires the member to view the situation through the lens of a “reasonable and informed third party” and exercise professional judgement to determine whether their actions would comply with the fundamental principles. The member must also remain alert for changes in facts and circumstances that could affect this assessment.

How to deal with NOCLAR requirements

The Hayne royal commission into Australia’s banking and finance sector highlighted the importance of identifying and addressing poor ethical behaviour and complying with laws and regulations. The restructured Code informs members on how to deal with circumstances associated with Non-Compliance with Laws and Regulations (NOCLAR). There are also enhanced provisions for members around preparing and reporting information, dealing with pressure to breach the fundamental principles, and handling inducements, including gifts and hospitality.

“There are also enhanced provisions for members around… dealing with pressure to breach the fundamental principles, and handling inducements.”
Channa Wijesinghe FCA, chief executive officer of the Accounting Professional & Ethical Standards Board.

Updates to APESB’s suite of pronouncements

The restructured Code overarches all APESB pronouncements, so a major project is underway to align APESB’s other 14 standards and six guidance notes with the restructured Code. This is on track to be completed before the Code’s commencement on 1 January 2020. The revised pronouncements will also include interactive PDF features. 

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For more information on the restructured Code and all APESB pronouncements, go to

Changes to the Code of Ethics are effective from 31 December 2021

The Code of Ethics defines the standard of behaviour expected of members of CA ANZ. The Code has recently been to incorporate changes made to the International Code of Ethics promoting the role and mindset expected of professional accountants.

Find out more