spacer
search icon cross white
spacer bookmark cross
search icon
Search Tags

  Total: Bookmarks

 Bookmark(s) Click icon to add bookmark(s) to my profile

  •  Local Bookmark is Empty

 User Profile Bookmark(s)

  •  Profile is Empty
MENU
spacer
bookmark cross white
A
search icon cross white
search icon
Search Tags

  Total: Bookmarks

Click icon to add bookmark(s) to my profile

 Bookmark(s)

 User Profile Bookmark(s)

close

Forgot password / username Re-send activiation email Register an account Help with web login

Code of Ethics for Professional Accountants (November 2018)

 

  


Technical Resources

This webpage contains pronouncements, guides and articles that are relevant to the Code of Ethics for Professional Accountants (November 2018).

                                                                      

Why do we need a new standard

In November 2018, the Institute has revised the Code of Ethics for Professional Accountants (the “revised Code”) adopting the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board (the “International Code”) in April 2018.

 

The revised Code issued by the Institute consists of the following Chapters:

  • A is based on the International Code

  • [B – not used]

  • C contains either local application or represents an amplification of provisions in the International Code (i.e. Chapter A of this Code)

  • D is a comparison of the revised Code with the International Code

  • E applies to specialized areas of practice

  • F contains guidelines on anti-money laundering and counter-terrorist financing for professional accountants.

 

Chapters C, E and F are carried forward from the extant Code of Ethics for Professional Accountants (Revised February 2018) and form an integral part of the revised Code.

 

Chapter A of the revised Code includes substantive revisions and is completely rewritten under a new structure and drafting convention. The Code brings together key ethics advances over the past four years, including Responding to Non-Compliance with Laws and Regulations ("NOCLAR") and Long Association provisions and includes an enhanced conceptual framework. Key revisions include:

  • Revised “safeguards” provisions better aligned to threats to compliance with the fundamental principles;
  • Stronger independence provisions regarding long association of personnel with audit clients;
  • New and revised sections dedicated to professional accountants in business (PAIBs) relating to:

    • preparing and presenting information; and

    • pressure to breach the fundamental principles.

  • Clear guidance for accountants in public practice that relevant PAIB provisions are applicable to them;

  • New guidance to emphasize the importance of understanding facts and circumstances when exercising professional judgment; and

  • New guidance to explain how compliance with the fundamental principles supports the exercise of professional skepticism in an audit or other assurance engagements.

 

Effective Date

Chapter A of the revised Code will be effective as of 15 June 2019, subject to the following:

 

Independence Standards

  • Part 4A of Chapter A relating to independence for audit and review engagements will be effective for audits and reviews of financial statements for periods beginning on or after 15 June 2019.

  • Part 4B of Chapter A relating to independence for assurance engagements with respect to subject matter covering periods will be effective for periods beginning on or after 15 June 2019; otherwise, it will be effective as of 15 June 2019.

Long Association Provisions (Section 540)

The effective date of Chapter A of the revised Code does not override the effective date of the revised Long Association provisions in Sections 290 and 291 as set out in the January 2017 long association close-off document released by the International Ethics Standards Board for Accountants, which is as follows:                                     

  1. Subject to the transitional provision in (c) below, paragraphs 290.148 to 290.168 are effective for audits of financial statements for periods beginning on or after 15 December 2018. Early adoption is permitted.

  2. For assurance engagements covering periods, paragraphs 291.137 to 291.141 will be effective for periods beginning on or after 15 December 2018; otherwise, they will be effective as of 15 December 2018. Early adoption is permitted.

  3. Paragraph 290.163 shall have effect only for audits of financial statements for periods beginning prior to 15 December 2023. This will facilitate the transition to the required cooling-off period of five consecutive years for engagement partners in those jurisdictions where the legislative body or regulator (or organization authorized or recognized by such legislative body or regulator) has specified a cooling-off period of less than five consecutive years.

The effective dates of Chapter A are the same as that of the International Code. Early adoption is permitted.

 

Alignment of Part 4B of the Code to HKSAE 3000 (Revised)
Part 4B, Chapter A relating to independence for assurance engagements with respect to underlying subject matter covering periods will be effective for periods beginning on or after 15 June 2021; otherwise, it will be effective as of 15 June 2021. Early adoption will be permitted.

Revisions to the Code to Promote the Role and Mindset Expected of Professional Accountants
This pronouncement will be effective as of 31 December 2021. Early adoption will be permitted.

Revisions to the Code Addressing the Objectivity of an Engagement Quality Reviewer and Other Appropriate Reviewers
This pronouncement is effective as follows:
For Part 4A: audits and reviews of financial statements for periods beginning on or after 15 December 2022.
For Part 4B: assurance engagements beginning on or after 15 December 2022.

For all other engagements within the scope of Part 3: engagements beginning on or after 15 December 2022.

Early adoption is permitted.

 

Revisions to the non-assurance service provisions of the Code

The revised NAS provisions in Part 4A and Part 4B of Chapter A contain substantive revisions that will enhance the independence standards  by clarifying and addressing the circumstances in which firms and network firms may or may not provide a NAS to an audit or assurance client. The revised provisions include new requirements that expressly prohibit firms and network firms from providing certain types of NAS to their audit clients, especially when they are public interest entities (PIEs).

The pronouncement is effective as follows:

  •  Revised Section 600 and the conforming amendments to Part 4A will be effective for audits and reviews of financial statements for periods beginning on or after 15 December 2022. 
  • The conforming and consequential amendments to Sections 900 and 950 in relation to assurance engagements with respect to underlying subject matters covering periods of time will be effective for periods beginning on or after 15 December 2022; otherwise, these amendments will be effective as of 15 December 2022.
  • Transitional Provision: For non-assurance services engagements a firm or network firm has entered into with an audit client, or for non-assurance services engagements a firm has entered into with an assurance client, before 15 December 2022 and for which work has already commenced, the firm or network firm may continue such engagements under the extant provisions of the Code until completed in accordance with the original engagement terms.

Early adoption will be permitted. 

Revisions to the fee-related provisions of the Code

The revisions to the fee-related provisions of the code include a prohibition on firms allowing the audit fee to be influenced by the provision of services other than audit to the audit client; in the case of PIEs, a requirement to cease to act as auditor if fee dependency on the audit client continues beyond a specified period; communication of fee-related information to TCWG and to the public to assist their judgments about auditor independence; and enhanced guidance on identifying, evaluating and addressing threats to independence.

The pronouncement is effective as follows:

  • For the revised Section 410 and consequential amendments to Part 4A: effective for audits of financial statements for periods beginning on or after 15 December 2022.
  • For the revised Section 905: in relation to assurance engagements with respect to underlying subject matters covering periods of time, effective for periods beginning on or after 15 December 2022; otherwise, effective as of 15 December 2022. 
  • For conforming and consequential amendments to other sections in Chapter A of the Code: effective as of 15 December 2022. 

Early adoption will be permitted

 
 

 

 

  Click below for more information


901BTRIBe   

HKICPA Code of Ethics for Professional Accountants

901BTRIBe IESBA International Code of Ethics for Professional Accountants (including International Independence Standards)
901BTRIBe
IESBA eCODE 
901BTRIBe

Close-Off: Changes to the Code Addressing the Long Association of Personnel with an Audit or Assurance Client

901BTRIBe
Final Pronouncement: Alignment of Part 4B of the Code to ISAE 3000 (Revised) (January 2020)
901BTRIBe

Final Pronouncement: Revisions to the Code to Promote the Role and Mindset Expected of Professional Accountants (October 2020)

901BTRIBe
Final Pronouncement: Objectivity of Engagement Quality Reviewer and Other Appropriate Reviewers (January 2021)
901BTRIBe  Final Pronouncement: Revisions to the Non-Assurance Service Provisions of the Code (April 2021)
901BTRIBe

Final Pronouncement: Revisions to the Fee-Related Provisions of the Code (April 2021)

901BTRIBe

Exploring the IESBA Code:new

  • Installment 1: The Five Fundamental Principles
  • Installment 2: The Conceptual Framework–Step 1, Identifying Threats
  • Installment 3: The Conceptual Framework–Step 2, Evaluating Threats
  • Installment 4: The Conceptual Framework – Step 3, Addressing Threats
  • Installment 5: Independence
  • Installment 6: Conflicts of Interest
  • Installment 7: Inducements, Including Gifts and Hospitality
  • Installment 8: Responding to Non-Compliance with Laws and Regulations [for PAIBs]
  • Installment 9: Responding to Non-Compliance with Laws and Regulations [for PAPPs]
  • Installment 10: Pressure to Breach the Fundamental Principles
  • Installment 11: The Role and Mindset Expected of Accountants—A Focus on Bias
  • The Building Blocks Installment

 

Focus:



Additional references issued by Standard Setters and Regulators
901BTRIBe The Institute Standard Setting Department
 
   
Additional references issued by other organisations
901BTRIBe International Ethics Standards Board for Accountants (IESBA)
 

Publications

Webinars

COVID-19 related

901BTRIBe

International Federation of Accountants (IFAC)

901BTRIBe Hong Kong Business Ethics Development Centre, ICAC Hong Kong 
A Plus articles
901BTRIBe
The role and mindset expected of professional accountants (April 2021)

 

 

 

 

Last updated: 30 June 2021

 

Frequently used resources

 
 



Technical enquiries

  Click here to submit questions on standards issued by the Institute.
   
 
gotop