By MIA CPE Compliance Department
Ethics is the cornerstone of the accounting profession, ensuring transparency, underpinning regulatory compliance, and upholding public trust. With evolving business practices and regulations, Continuing Professional Education (CPE) is essential for professional accountants to stay updated, maintain credibility and uphold professional responsibility. This article outlines the changes in CPE requirements for ethics-related training and highlights the critical role of ethics in the accounting profession, emphasising its importance for maintaining professional integrity and compliance.
The Importance of Ethics in Accounting
Trust and Credibility
Ethical accounting practices are essential for fostering trust with stakeholders, including clients, investors, regulators, and the public. Accurate and honest financial reporting enhances credibility, enabling stakeholders to make informed decisions.
Compliance with Laws and Regulations
Ethical professional accountants are responsible for adhering to financial laws, regulations, and industry standards. Ethical conduct ensures compliance, protecting both the professional accountants and their organisation from legal consequences, financial penalties, and reputational damage.
Prevention of Fraud and Misconduct
Unethical practices, such as financial misstatements and fraud can lead to severe consequences, including financial scandals, bankruptcies, and loss of public trust. Professional accountants must act as gatekeepers against such malpractices by maintaining high ethical standards.
Accountability and Professional Integrity
Professional accountants are responsible for presenting financial information fairly and objectively. Upholding ethical standards ensures that professional accountants present a true and fair view of an organisation’s financial position, maintaining the integrity of the profession.
Protecting Stakeholder Interests
Ethical practices protect the interests of shareholders, employees, creditors, and the public. Transparent financial reporting enables stakeholders make sound decisions based on accurate information.
Professional Reputation
Ethical professional accountants earn the respect of their peers, employers, fostering career advancement and professional growth. In contrast, unethical behaviour can erode public trust, cause adverse impacts on stakeholder interests, and negatively impact the broader economy.
Considering this, the Institute has made professional ethics training mandatory for all members effective 1 January 2026.
New CPE Requirements (effective 1 January 2026)
Starting 1 January 2026, the CPE requirements for professional accountants will include mandatory ethics training. As part of the 20 structured and verifiable CPE credit hours obtained each calendar year, all professional accountants must complete a minimum of 2 structured and verifiable CPE hours which are related to professional ethics.
This update underscores the growing importance of ethics in the accounting profession and ensures that professional accountants remain up-to-date on evolving ethical standards, legal requirements, and best practices.
Why Focus on Ethics in CPE
Adapting to Changing Regulations
Financial regulations, laws and ethical guidelines are continuously evolving. Ethics-focused CPE courses help professional accountants stay informed about new laws and regulations, such as the Anti-Money Laundering laws, corporate governance standards, ensuring they fulfil both legal and professional obligations.
Preventing Fraud and Misconduct
Professional accountants must be equipped to identify red flags for fraud, unethical behaviour, and misconduct. Ethics-focused CPE programmes help build skills to address ethical dilemmas and uphold internal controls, thereby protecting the integrity of financial reporting.
Enhancing Public Trust
The accounting profession thrives on public trust. Ethical lapses, such as fraudulent financial reporting or conflicts of interest, can severely damage the profession’s credibility. By prioritising ethics in CPE, professional accountants demonstrate their commitment to accountability and transparency.
Global Standards and Compliance
The International Federation of Accountants (IFAC) emphasises the importance of ethics in maintaining profession competence. The updated CPE requirements align with global standards, ensuring that professional accountants meet both local and international ethical expectations.
According to the International Code of Ethics for Professional Accountants, professional accountants are required to adhere to fundamental principles such as integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour.
Additionally, the International Education Standard (IES) 7 which outlines the Continuing Professional Development (CPD) requirements for professional accountants, clarifies the principles and guidelines for how professional accountancy organisations should measure, monitor, and enforce their CPD systems. Measurement includes evaluating evidence of CPD in terms of achieving the learning outcomes or completing specified amounts of learning and development activities related to technical competence, professional skills, and professional values, ethics and attitudes. It highlights that all professional accountants must develop and maintain the professional competence required to perform their roles. Failure to develop and maintain this professional competence may be a violation of the code of ethics, leading to disciplinary actions and diminishing the professional accountant’s ability to act in the public interest.
CPE Requirements of Other Professional Accounting Bodies
Other professional accountancy bodies have also emphasised the importance of ethics training by requiring CPE hours in ethics as a mandatory component of their continuing education programmes.
For example, starting in October 2023, members of CPA Australia must complete a minimum of 2 verifiable CPD hours annually on ethics-related topics, with a total of 10 hours over a three-year period (triennium).
Similarly, the Institute of Singapore Chartered Accountants (ISCA) requires members to complete a minimum of 20 verifiable CPE hours per year, including at least 2 verifiable hours in ethics annually. Alternatively, members may complete 6 verifiable ethics hours over a rolling three-year period.
Meanwhile, the Institute of Chartered Accountants in England and Wales (ICAEW) does not mandate specific CPD topics, given the diverse nature of its members’ work. However, ethics is the exception, and members must complete at least 1 verifiable hour of ethics-related training each CPD year to comply with regulatory requirements.
How Accountants Can Stay Updated on Ethics
Conclusion
Ethics are fundamental to maintaining trust and integrity in the accounting profession. With the introduction of mandatory ethics training as part of CPE requirements, professional accountants will be better equipped to meet evolving ethical challenges, comply with regulations, and continue safeguarding public trust. By prioritising ethics in their professional development, professional accountants can enhance their credibility, protect stakeholders’ interests, and contribute to a more transparent financial system.
