Section 5110Part 5

The Fundamental Principles

General

5110.1 A1 There are five fundamental principles of ethics for sustainability assurance providers:

(a)

Integrity – to be straightforward and honest in all professional and business relationships.

(b)

Objectivity – to exercise professional or business judgment without being compromised by:

(i)

Bias;

(ii)

Conflict of interest; or

(iii)

Undue influence of, or undue reliance on, individuals, organizations, technology or other factors.

(c)

Professional Competence and Due Care – to:

(i)

Attain and maintain professional knowledge and skill at the level required to ensure that a sustainability assurance client receives competent professional service, based on current technical and professional standards and relevant legislation; and

(ii)

Act diligently and in accordance with applicable technical and professional standards.

(d)

Confidentiality – to respect the confidentiality of information acquired as a result of professional and business relationships.

(e)

Professional Behavior – to:

(i)

Comply with relevant laws and regulations;

(ii)

Behave in a manner consistent with acting in the public interest in all professional activities and business relationships relating to sustainability assurance clients; and

(iii)

Avoid any conduct that the sustainability assurance provider knows or should know might affect public trust in sustainability information that is subject to assurance.

R5110.2

A sustainability assurance provider shall comply with each of the fundamental principles. 5110.2 A1 The fundamental principles of ethics establish the standard of behavior expected of a sustainability assurance provider. The conceptual framework establishes the approach which a practitioner is required to apply in complying with those fundamental principles. Subsections 5111 to 5115 set out requirements and application material in this Part related to each of the fundamental principles. 5110.2 A2 A sustainability assurance provider might face a situation in which complying with one fundamental principle conflicts with complying with one or more other fundamental principles. In such a situation, the practitioner might consider consulting, with: • Others within the firm. • Those charged with governance. • Institute • Legal counsel.

However, such consultation does not relieve the practitioner from the responsibility to exercise professional judgment to resolve the conflict or, if necessary, and unless prohibited by law or regulation, disassociate from the matter creating the conflict. 5110.2 A3 The sustainability assurance provider is encouraged to document the substance of the issue, the details of any discussions, the decisions made and the rationale for those decisions.

SUBSECTION 5111 – INTEGRITY

R5111.1

A sustainability assurance provider shall comply with the principle of integrity, which requires a practitioner to be straightforward and honest in all professional and business relationships. 5111.1.1 A1 A Chartered Accountant shall comply with the principle of honesty, which requires an accountant to be honest and upright as a citizen, and in the personal affairs. 5111.1.1 A2 A chartered accountant shall imbibe the ideal of Satyameva Jayate (Sanskrit: सत्यमेव जयते) which means 'Truth alone triumphs' , being part of the Mundaka Upanishad , and adopted as national motto of India. 5111.1 A1 Integrity involves fair dealing, truthfulness and having the strength of character to act appropriately, even when facing pressure to do otherwise or when doing so might create potential adverse personal or organizational consequences. 5111.1 A2 Acting appropriately involves:

(a)

Standing one’s ground when confronted by dilemmas and difficult situations; or

(b)

Challenging others as and when circumstances warrant, in a manner appropriate to the circumstances.

R5111.2

A sustainability assurance provider shall not knowingly be associated with reports, returns, communications or other information where the practitioner believes that the information:

(a)

Contains a materially false or misleading statement;

(b)

Contains statements or information provided ‘in grossly negligent manner; or

(c)

Omits or obscures required information where such omission or obscurity would be misleading. 5111.2 A1 If a sustainability assurance provider provides a modified report in respect of such a report, return, communication or other information, the practitioner is not in breach of paragraph R5111.2.

R5111.3

When a sustainability assurance provider becomes aware of having been associated with information described in paragraph R5111.2, the practitioner shall take steps to be disassociated from that information.

SUBSECTION 5112 – OBJECTIVITY

R5112.1

A sustainability assurance provider shall comply with the principle of objectivity, which requires a practitioner to exercise professional or business judgment without being compromised by:

(a)

Bias;

(b)

Conflict of interest; or

(c)

Undue influence of, or undue reliance on, individuals, organizations, technology or other factors.

R5112.2

A sustainability assurance provider shall not undertake a professional activity for a sustainability assurance client if a circumstance or relationship unduly influences the practitioner’s professional judgment regarding that activity.

SUBSECTION 5113 – PROFESSIONAL COMPETENCE AND DUE CARE

R5113.1

A sustainability assurance provider shall comply with the principle of professional competence and due care, which requires a practitioner to:

(a)

Attain and maintain professional knowledge and skills at the level required to ensure that a sustainability assurance client receives competent professional service, based on current technical and professional standards and relevant legislation; and

(b)

Act diligently and in accordance with applicable technical and professional standards. 5113.1 A1 Serving sustainability assurance clients with professional competence involves the exercise of sound judgment in applying professional knowledge and skill when undertaking professional activities. 5113.1 A2 The knowledge and skills necessary for a professional activity vary depending on the nature of the activity being undertaken.

For example, in addition to the application of any technical knowledge relevant to the professional activity, interpersonal, communication and organizational skills facilitate the practitioner’s interaction with entities and individuals with whom the practitioner interacts. 5113.1 A3 Maintaining professional competence requires a sustainability assurance provider to have a continuing awareness and understanding of technical, professional, business and technology-related developments relevant to the professional activities undertaken by the practitioner.

Continuing professional development enables a practitioner to develop and maintain the capabilities to perform competently within the professional environment. 5113.1 A4 Diligence encompasses the responsibility to act in accordance with the requirements of an assignment, carefully, thoroughly and on a timely basis.

R5113.2

In complying with the principle of professional competence and due care, a sustainability assurance provider shall take reasonable steps to ensure that those working in a professional capacity under the practitioner’s authority have appropriate training and supervision.

R5113.3

Where appropriate, a sustainability assurance provider shall make sustainability assurance clients or other users of the practitioner’s professional activities, aware of the limitations inherent in the activities and explain the implications of those limitations.

SUBSECTION 5114 – CONFIDENTIALITY

R5114.1

A sustainability assurance provider shall comply with the principle of confidentiality, which requires a practitioner to respect the confidentiality of information acquired in the course of professional and business relationships. A practitioner shall:

(a)

Be alert to the possibility of inadvertent disclosure, including in a social environment, and particularly to a close business associate or an immediate or a close family member;

(b)

Maintain confidentiality of information within the firm;

(c)

Maintain confidentiality of information disclosed by a prospective sustainability assurance client; and

(d)

Take reasonable steps to ensure that personnel under the practitioner’s control, and individuals from whom advice and assistance are obtained, comply with the practitioner’s duty of confidentiality. 5114.1 A1 Maintaining the confidentiality of information acquired in the course of professional and business relationships involves the sustainability assurance provider taking appropriate action to protect the confidentiality of such information in the course of its collection, use, transfer, storage or retention, dissemination and lawful destruction.

R5114.2

Subject to paragraph R5114.3, a sustainability assurance provider shall not:

(a)

Disclose confidential information acquired in the course of professional and business relationships;

(b)

Use confidential information acquired in the course of professional and business relationships for the advantage of the practitioner, the firm or a third party;

(c)

Use or disclose any confidential information, either acquired or received in the course of a professional or business relationship, after that relationship has ended; and

(d)

Use or disclose information in respect of which the duty of confidentiality applies notwithstanding that the information has become publicly available, whether properly or improperly.

R5114.3

As an exception to paragraph R5114.2, a sustainability assurance provider may disclose or use confidential information where:

(a)

There is a legal or professional duty or right to do so; or

(b)

This is authorized by the sustainability assurance client or any person with the authority to permit disclosure or use of the confidential information and this is not prohibited by law or regulation. 5114.3 A1 Confidentiality serves the public interest because it facilitates the free flow of information from the sustainability assurance client to the sustainability assurance provider in the knowledge that the information will not be disclosed to a third party. Nevertheless, the following are circumstances where sustainability assurance providers might be required or have the duty or right to disclose confidential information:

(a)

Disclosure is required by law or regulation, for example:

(i)

Production of documents or other provision of evidence in the course of legal proceedings; or

(ii)

Disclosure to the appropriate public authorities of infringements of the law that come to light; and

(b)

There is a professional duty or right to disclose or use, when not prohibited by law or regulation:

(i)

To comply with the requirements of peer review or quality review or such other review by the Institute;

(ii)

To respond to an inquiry or investigation by the Institute or other regulator;

(iii)

To protect the professional interests of a practitioner in legal proceedings or meet the ends of justice in legal proceedings when demanded by the court; 5114.3 A2 In deciding whether to disclose or use confidential information, factors to consider, depending on the circumstances, include: • Whether the interests of any parties, including third parties whose interests might be affected, could be harmed if the sustainability assurance client authorizes the disclosure or use of information by the sustainability assurance provider. • Whether all the relevant information is known and substantiated, to the extent practicable. Factors affecting the decision to disclose or use, the information include: o Unsubstantiated facts. o Incomplete information. o Unsubstantiated conclusions. • The proposed means of communicating the information. • Whether the parties to whom the information is to be provided or access is to be granted are appropriate recipients. • Any applicable law or regulation (including those governing privacy) in a jurisdiction where disclosure might take place and, if different, the jurisdiction where the confidential information originates.

R5114.4

A sustainability assurance provider shall continue to comply with the principle of confidentiality even after the end of the relationship between the practitioner and a sustainability assurance client. When acquiring a new sustainability assurance client, the practitioner is entitled to use prior experience but shall not use or disclose any confidential information acquired or received in the course of a professional or business relationship.

SUBSECTION 5115 – PROFESSIONAL BEHAVIOUR

R5115.1

A sustainability assurance provider shall comply with the principle of professional behaviour, which requires a practitioner to:

(a)

Comply with relevant laws and regulations;

(b)

Behave in a manner consistent with acting in the public interest in all professional activities and business relationships relating to sustainability assurance clients; and

(c)

Avoid any conduct that the practitioner knows or should know might affect public trust in sustainability information that is subject to assurance.

A sustainability assurance provider shall not knowingly engage in any business, occupation or activity that impairs or might impair public trust in sustainability information that is subject to assurance, and as a result would be incompatible with the fundamental principles. 5115.1 A1 Conduct that might adversely affect public trust in sustainability information that is subject to assurance includes conduct that a reasonable and informed third party would be likely to conclude has such an effect.

R5115.2

When promoting himself and his work, a sustainability assurance provider shall not bring the profession into disrepute. A sustainability assurance provider is required to conduct his affairs in a manner that he remains outside the boundaries of professional and other misconduct. A sustainability assurance provider shall be honest and truthful and shall not make:

(a)

Exaggerated claims for the services offered by, or the qualifications or experience of, the accountant; or

(b)

Disparaging references or unsubstantiated comparisons to the work of others.

(c)

Any direct or indirect measures to advertise any professional/other facts which are in violation of Advertisement Guidelines issued by the Council of the Institute from time to time. 5115.2 A1 The sustainability assurance provider should ensure that the contents of an advertisement are true to the best of his knowledge and belief, and are in conformity with the Advertisement Guidelines, and be aware that the Institute does not own any responsibility, whatsoever, for such contents or claims by him. If a sustainability assurance provider is in doubt about whether a form of advertising is appropriate, the practitioner is encouraged to consult with the Ethical Standards Board of ICAI. .