CIMA releases updated code of ethics for 2020

The world’s largest body of management accountants – The Chartered Institute of Management Accountants (CIMA) – has updated its code of ethics to help finance professionals navigate ethical and independence challenges in the modern, digital business world.

CIMA’s new Code wraps up the Institute’s campaign exploring ‘ethics in the age of digital transformation’ and will come into force on 1 January 2020.

The new Code aims to build on the core principles of ethics of the management accounting profession and to ensure  financial professionals are equipped with the tools and resources needed to safeguard the accounting profession and the public interest as the industry becomes increasingly more digitally focused.

The updated Code includes:

• A revised conceptual framework to help finance professionals identify, assess and address ethical threats, and ensure that they remain independent and objective when exercising professional judgement.
• New material emphasising the importance of capturing and understanding relevant facts and circumstances when exercising professional judgment.
• Strengthened provisions relating to the preparation and presentation of information to ensure effective governance, and a new section relating to pressure to breach the profession’s core principles.
• Revised provisions relating to offering and accepting of inducements, including gifts, hospitality and entertainment, to ensure finance professionals exhibit the highest standards of ethical behaviour at all times.
• Greater transparency for CIMA members about when CIMA will take action to enforce breaches.
• A new structure and format based on the International Ethics Standards Board for Accountants’ (IESBA) revised and restructured code.

Andrew Harding, FCMA, CGMA, Chief Executive – Management Accounting, said: “At a time where new and emerging technologies are having a profound impact on the way we do business, public trust in business is eroding faster than ever. With the growing strategic importance of the finance function, it is essential that our profession continues to uphold the highest ethical standards and guide their organisations to do business responsibly.

“As trusted strategic advisors, management accountants use their skills and competencies to combine financial and non-financial data, translate this information into meaningful and actionable business insights that enable business leaders to make better decisions. This includes a responsibility to act ethically, foster ethical management processes and a duty to act in the public interest. The introduction of the updated Code reinforces those values and supports all members to face the professional challenges of our digital world.”

All CIMA members and students  are required to abide by the Code of Ethics and apply its fundamental principles in their working lives. They are all expected by the Institute to observe the highest standards of conduct and integrity, and failure to do so can result in a sanction being enforced against a member or CIMA student – including financial fines and – in the case of members – expulsion from the profession.

CIMA’s report on ethics in the digital age states: “Failure to address ethical risks holds significant risks for a business, including reputational damage, loss of customer loyalty, declining sales and profitability, regulatory investigation, liability risk and the loss of trust.”

The Institute provides a range of resources that are designed to help members and students understand the CIMA Code of Ethics and help them prepare for the ethical challenges they may face in their professional lives.