In a landmark move for the accounting and auditing profession, the Institute of Chartered Accountants of India (ICAI) has released a revamped Code of Ethics 2025, bringing sweeping updates across Volumes I, II, and III. The updated framework aligns closely with the International Ethics Standards Board for Accountants (IESBA) 2024 Code, reinforcing India’s commitment to global ethical and professional standards.
The Code of Ethics 2025 will come into effect from April 1, 2026, with a transitional period for adaptation and training. ICAI also plans to release e-learning modules and explanatory guides to help members and firms implement the new standards effectively.
The new Code reflects the rapidly evolving landscape of technology, sustainability, and assurance, introducing fresh guidance on Artificial Intelligence (AI), sustainability assurance, and forensic accounting—areas of growing significance in the modern audit and advisory ecosystem.
Volume I – Global Alignment & Integrity Focus
Volume I now mirrors the structure and spirit of the IESBA 2024 Code, emphasizing independence, objectivity, and public interest. Enhanced definitions and cross-references ensure consistency with international norms. It also integrates technology-driven risks, particularly in AI-assisted audits and data analytics, ensuring that integrity remains central to professional conduct.
Volume II – Domestic & Practical Updates
The second volume focuses on India-specific provisions, translating global standards into practical domestic applications. ICAI has refined interpretations to address challenges faced by firms in multidisciplinary practices, network affiliations, and digital assurance services. Additional guidance covers sustainability and ESG reporting assurance, reflecting the profession’s expanding role in non-financial disclosures.
Volume III – Ethical Guidelines Recast
Volume III presents a complete restructuring of disciplinary and ethical guidelines, simplifying interpretation for members and firms. It consolidates prior circulars, opinions, and disciplinary precedents into a coherent, modernized structure, improving accessibility and implementation.
Key Highlights
- AI & Forensic Integration: New ethical principles for the use of artificial intelligence, algorithmic transparency, and digital forensics.
- Sustainability Assurance: Explicit inclusion of ESG and sustainability assurance engagements under the Code’s ethical umbrella.
- Stricter Independence Norms: Strengthened independence requirements for auditors, particularly in multidisciplinary and consulting setups.
- Modernized Professional Guidelines: Clearer delineation between assurance, advisory, and ancillary services to mitigate conflict of interest risks.
The ICAI emphasized that these changes are designed to prepare Indian chartered accountants for global interoperability and emerging ethical challenges in a data-driven and sustainability-focused economy.
