New Insolvency Code of Ethics – Effective Date 8 June 2020

Jun 01, 2020

The new Insolvency Code of Ethics has now been approved by IAASA and will be effective from 8 June 2020.

The Insolvency Code of Ethics constitutes Part 5 of the Code of Ethics for members of Chartered Accountants Ireland and replaces Part D of the previous Code of Ethics.  Parts 1 to 4 of the revised Code of Ethics are effective since 1 March 2020.  The full Code of Ethics (Parts 1-5) are available to read in the Ethics Resource Centre.

The code has been updated following a consultation on possible revisions and to adopt the drafting format used by the International Ethics Standards Board for Accountants (IESBA). The accountancy Recognised Professional Bodies (RPBs) use the IESBA approach in their main ethical codes.

What is different?

  • The new format differentiates between requirements (identified by an R) and application material (identified by an A).
  • There is an entirely new section on the insolvency practitioner as an employee which emphasises that an insolvency practitioner is required to comply with the Insolvency Code of Ethics irrespective of their status within a firm.
  • The sections on obtaining specialist advice and services, agencies and referrals, referral fees and commission and inducements have all been expanded.
  • There is a new section on Responding to non-compliance with laws and regulations based on IESBA material.
  • There are new examples specific to the Republic of Ireland.
Although the new Insolvency Code of Ethics does look a little different, the fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour remain as the key concepts in the code.