Institute of Chartered Accountants new Code of Ethics effective from 15 July

By Dr. Wickrema Weerasooria

All professional bodies prepare and issue mandatory Codes of Practice or Ethics. Such codes are aimed not only to protect and preserve the integrity of the particular professional, but also demarcate the professional obligations and conduct that is expected of professionals to their clients. Basically such codes have a three-fold purpose:

Benefitting clients who engage professionals;

Benefitting the individual professional to ensure that he does not over-step established norms.

Benefit that professional body as a whole to maintain the respect it has among the general public. 

In the above context, I must congratulate the Institute of Chartered Accountants of Sri Lanka for publishing their latest Code of Ethics of 2016. The code is mandatory and comes into effect from 15 July.

This code which consists of about 240 pages is based on the Handbook of the Code of Ethics for Professional Accountants, 2016 Edition of the International Ethics Standards Board for Accountants (IESBA), which was published by the International Federation of Accountants (IFAC) in August 2016. The Sri Lankan Institute has resorted to that code with permission of IFAC.

The President of the institute Lasantha Wickremasinghe in a message published in the Code of Ethics of 2016, states: “As members of a distinguished profession, it is mandatory for chartered accountants to comply with the highest standards of professional ethics, which plays an important role in enhancing the reputation of our professional members further, and ensuring that their demand both locally and globally continues. But as we become more diverse in our professional roles, and in the backdrop of continuing challenges and complexities, the issues facing us as accounting professionals become that much more complex. Therefore there is a renewed need to ensure that we continue to comply with ethics on a daily basis in discharging our professional duties.”

Reyaz Mihular, Chairman of the Professional Conduct of the Ethics Committee of the institute in a foreword to the code states: “Professional bodies have enforced and prescribed codes of practice for their members to prevent them from the exploitation of the client or employer and to preserve the integrity of the profession. This is not only for the benefit of the client or the employer but also for the benefit of those belonging to the profession.

As a premier accounting professional body, the Institute of Chartered Accountants of Sri Lanka has also recognised adhering to the ethical requirements as pivotal in performing professional duties by its members. The quotation below extracted from the introduction of the first Code of Professional Conduct and Ethics of the Institute of Chartered Accountants of Sri Lanka sets out clearly the spirit behind the code:

“Ethical Conduct, in the true sense, is more than merely abiding by the letter of explicit prohibitions. Rather, it requires unswerving commitment to honourable behaviour, even at the sacrifice of personal advantage.”

As stated above this Code of Ethics of 2016 is mandatory and binding on all members of the institute. It is effective from 15 July 2017.

From about January this year I have served as a member of the Ethics Committee of the institute. I am one of three lawyers who serve on this committee consisting of 22 members all of whom are Chartered Accountants. With my years of experience in public life I am happy to say that I consider it a privilege to serve on this Ethics Committee which is chaired by Reyaz Mihular and which meets about once a month.