Part A: General application of the code
Part A of the code establishes the fundamental principles of professional ethics for professional accountants. It also provides a conceptual framework that they shall use to identify, evaluate and apply safeguards to eliminate threats to compliance with the fundamental principles.
Part B: Professional Accountants in Public Practice
Part B applies to professional accountants in public practice, and describes how the conceptual framework applies in certain situations. It provides examples of safeguards that may be appropriate to address threats to compliance with the fundamental principles. It also describes situations where safeguards are not available to address the threats, and consequently, the circumstance or relationship creating the threats shall be avoided. Professional accountants in public practice may also find Part C relevant to their particular circumstances.
Part C: Professional Accountants in Business (CGMAs)
Part C applies to professional accountants in business, and describes how the conceptual framework applies in certain situations. Part C of the Code was developed in cooperation with the American Institute of Certified Public Accountants (AICPA); and, like Parts A and B, the elements of the updated Part C which apply to CIMA members and students continue to reflect IFAC’s fundamental principles and conceptual framework approach.
Fundamental principles
CIMA's code of ethics is made up of five fundamental principles:
- Integrity. Being straightforward, honest and truthful in all professional and business relationships. You should not be associated with any information that you believe contains a materially false or misleading statement, or which is misleading by omission.
- Objectivity. Not allowing bias, conflict of interest or the influence of other people to override your professional judgement.
- Professional competence and due care. An ongoing commitment to your level of professional knowledge and skill. Base this on current developments in practice, legislation and techniques. Those working under your authority must also have the appropriate training and supervision.
- Confidentiality. You should not disclose professional information unless you have specific permission or a legal or professional duty to do so.
- Professional behaviour. To comply with relevant laws and regulations. You must also avoid any action that could negatively affect the reputation of the profession.
The code explains these principles, and gives examples of their use for professional accountants in practice (Part B) and professional accountants in business (Part C). The code establishes a conceptual framework that requires a professional accountant to identify, evaluate, and address threats to compliance with the fundamental principles.
Threats
The code identifies five categories of common threat to the five principles:
- Self interest threat. Commonly called a 'conflict of interest' which may inappropriately influence judgement or behaviour.
- Self review threat. When you are required to evaluate the results of a previous judgement or service.
- Advocacy threat. Arising if promoting a position or opinion to the point that your subsequent objectivity is compromised.
- Familiarity threat. When you become so sympathetic to the interests of others as a result of a close relationship that your professional judgement becomes compromised.
- Intimidation threat. When you are deterred from acting objectively by actual or perceived pressure or influence.
Safeguards
Our code has a 'threats and safeguards' approach to resolving ethical issues. This means that if you think there is a threat, you should assess whether the threat is significant. Then, take action to remove or mitigate it.
Employing institutions often have safeguards: whistleblowing or grievance procedures. Safeguards are also created by the profession, legislation or regulation.
Please note that this page is a summary of key principles of our code of ethics. The code should be consulted in full for a complete understanding of CIMA's ethical requirements.