Professional Standards: CIMA's New Code of Ethics, Which Is Now in Force, Is Based on Principles Rather Than Rules. Danielle Cohen Explains Why This Will Make It Even More Effective

Article excerpt

On January 1 the new CIMA code of ethics for professional accountants took effect, setting out the principles of professional behaviour required of all members and students.

In order to support its members and students in their application of these principles, the institute has produced a user-friendly, interactive CD-Rom that contains the code, along with relevant supporting information, in an easily searchable format. The disc is attached to the front cover of this issue. If you did not receive yours, e-mail ethics@ for a copy. The code is also available to view on CIMA's web site at

The new code replaces the institute's previous ethical guidelines with more comprehensive information that reflects developments in ethics across the accountancy profession in recent years. Rather than stipulating a set of rules, it establishes a framework of fundamental principles, describes potential threats to compliance and identifies possible safeguards to help mitigate these threats.

The code requires accountants to analyse situations in order to assess threats to the principles and then apply appropriate safeguards to remove or reduce the threats. Many people consider this approach to be more comprehensive than that of a system based on rules, because, although rules can sometimes be circumvented, principles are applicable across a wider range of circumstances.

As well as being in the public interest, the code offers more support for members and students. The comprehensive new package contains specific guidance for professional accountants in business (part C) and professional accountants in public practice (part B), as well as examples of threats and safeguards to clarify the following fundamental principles:

* Integrity.

* Objectivity.

* Professional competence and due care.

* Confidentiality.

* Professional behaviour.

These principles are defined and explained in part A of the code. The code complies fully with international standards including the International Federation of Accountants' code of ethics, which was developed with input from CIMA and other accounting bodies worldwide. …