ICAI Issues Revised Code of Ethics in Three Volumes

1. Introduction

The Institute of Chartered Accountants of India (ICAI) has issued the revised Code of Ethics (13th Edition) comprising Volume I, Volume II and Volume III. The revised framework strengthens the ethical and professional guidance applicable to chartered accountants and reflects ICAI’s continued efforts to align ethical standards with evolving professional and global expectations.

The revised Code of Ethics (13th Edition) shall be applicable from April 1, 2026, except for one specific provision relating to management consultancy services.

A notable inclusion relates to serial number (xxxi) under Management Consultancy and Other Services issued under Section 2(2)(iv) of the Chartered Accountants Act, 1949. This provision covers “Assessment and evaluation of Social Impact, CSR Impact, Business Responsibility and Sustainability Reporting, and the like.” Unlike the general applicability date, this specific service category became effective on December 11, 2025.

The revised Code has been organised into three separate volumes to provide focused guidance on domestic ethical requirements, international ethical convergence and sustainability assurance standards. Let us get a brief understanding of each of these volumes.

2. Volume I of the Code of Ethics

Volume I issued by ICAI is not merely a compilation of disciplinary provisions or statutory extracts. It serves as a comprehensive domestic ethical and regulatory framework that guides chartered accountants in practice as well as in service on how to conduct themselves professionally, responsibly and independently. The document reinforces ICAI’s long-standing position that ethical conduct is central to maintaining public trust and professional credibility.

Volume I offers readers a structured understanding of the Chartered Accountants Act, 1949, Council Guidelines, ethical requirements and professional misconduct provisions applicable in India. It also incorporates important contemporary developments, including relaxation in advertisement norms and strengthened provisions concerning independence, conflicts of interest and professional conduct.

A major portion of Volume I is devoted to explaining the First and Second Schedules to the Chartered Accountants Act, 1949, which define professional and other misconduct. The Code categorises misconduct separately for members in practice and for members in service.

Furthermore, it highlights the expanding scope of services permissible for chartered accountants under Section 2(2)(iv). Besides traditional management consultancy services, the revised Code recognises modern professional domains such as:

a) Forensic Accounting and Investigation

b) Research Analyst services

c) Social Impact and Sustainability-related assessment

d) Artificial Intelligence consultancy in permitted service areas

This signals ICAI’s recognition of evolving business realities and provides members with clarity on new professional opportunities available within ethical boundaries.

Click here to access Volume I of the Code of Ethics

3. Volume II of the Code of Ethics

Volume II represents ICAI’s convergence with the International Ethics Standards Board for Accountants (IESBA) Code of Ethics, 2024 Edition. Unlike Volume I, which primarily focuses on domestic legal and regulatory provisions, Volume II offers a principle-based ethical framework that guides chartered accountants in addressing practical ethical dilemmas, professional judgment, and independence-related challenges in an increasingly complex business environment.

One of the key offerings of Volume II is its clear emphasis that the accountancy profession carries a responsibility to act in the public interest. The Code recognises that businesses, regulators, investors and society place confidence in chartered accountants because of their ethical values, professional judgment and technical expertise. Accordingly, ethical compliance is positioned not merely as a regulatory obligation but as a professional responsibility.

Among the most significant aspects, the members should carefully study the Conceptual Framework contained in Section 120. Instead of prescribing a fixed answer for every ethical issue, the framework requires chartered accountants to:

a) Identify threats to compliance with ethical principles

b) Evaluate those threats

c) Address the threats by eliminating or reducing them to an acceptable level

The Code specifically requires accountants to maintain an inquiring mind, exercise professional judgment and apply the reasonable and informed third-party test while dealing with ethical matters.

Click here to access Volume II of the Code of Ethics

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