The International Ethics Standards Board for Accountants® (IESBA®) today released new enhancements to its global ethics code which address more fully the responsibilities of professional accountants around the offering and accepting of inducements.
The revised standard sets out a comprehensive framework that more clearly delineates the boundaries of acceptable inducements, and guides the behavior and actions of professional accountants in business and in public practice in situations involving inducements.
“Incentives motivate behavior, and some inducements can be a powerful incentive to unethical behavior,” said IESBA Chairman Dr. Stavros Thomadakis. “This revised standard complements our standard on NOCLAR to offer a full system of ethical defenses that relate both to malfeasance committed by others and to accountants’ own involvement in potentially unethical behaviors.”
Central to this framework is a new intent test that prohibits the offering or accepting of inducements where there is actual or perceived intent to improperly influence the behavior of the recipient or of another individual. The framework also:
Clarifies the meaning of an inducement;
Establishes a requirement to understand and comply with laws and regulations that prohibit the offering or accepting of inducements in certain circumstances, such as in relation to bribery and corruption;
Provides enhanced guidance on the offering and accepting of inducements by professional accountants’ immediate or close family members.
The revised provisions become effective June 2019, including consequential amendments to the independence provisions of the Code addressing gifts and hospitality. The changes constitute the last piece of the recently revised and restructured Code.