Updated Code of Ethics for insolvency practitioners issued

The Joint Insolvency Committee (JIC), together with the Recognised Professional Bodies, ICAEW, ICAS and IPA, have approved an updated Code of Ethics applicable to insolvency practitioners, which will come into effect on 1 October 2025.

The revised Code aligns the requirements applicable to insolvency practitioners (IPs) to the those in the amended International Ethics Standards Board of Accountants (IESBA) Code which was adopted by ICAEW on 1 July 2025 and ICAS on 1 January 2025.

The revisions relate to professional behaviour, role and mindset and technology, with consequential amendments as a result of the withdrawal of Chartered Accountants Ireland as a RPB and the withdrawal of ICAEW and ICAS as prescribed accountancy bodies in the Republic of Ireland.

Professional behaviour

The revised Code clarifies how IPs should behave as professionals, and the context in which they would be acting in their professional (rather than private) lives.

A new ‘reasonable and informed third party’ test has been introduced to be used in setting those expectations. The concept of a ‘reasonable and informed third party’ already features elsewhere in the Code but, to clarify the expectations of an IP’s personal conduct, the revised paragraph (2105.1 A2) (105.1 A2) now reads:

‘A reasonable and informed third party would expect that an insolvency practitioner, in their professional life, treats others fairly, with respect and dignity and for example does not bully, harass, victimise or unfairly discriminate against others.’

The revised wording now refers to an individual's 'professional life' and replaces previous wording that required IPs to treat those with whom they come into contact when performing their work with courtesy and consideration. The revised wording clarifies that the expectations of conduct exist in any element of an IP’s professional life, not just when performing client work. Any situation involving colleagues or clients, or where the IP is representing their employer, or the profession, could be relevant. This could include, for example, work social events even if they take place out of normal work hours and/or do not take place on work premises.

If an IP's professional status is visible on social media, their posts and remarks will be seen as made in their professional capacity. This is particularly the case for the LinkedIn network, but if the nature of an IP’s profession is obvious or easily discoverable, this is likely to be enough for any posts to be subject to ‘professional life’ standards.

There remains the overarching requirement not to discredit the profession and to comply with all relevant laws and regulations. It is possible to bring discredit through the actions in an individual’s private life, such as actions resulting in a criminal conviction.

The role and mindset revisions

The role and mindset revisions now emphasise the profession’s public interest responsibility by encouraging IPs to demonstrate the behavioural characteristics expected of them.

Key changes include:

• Highlighting the importance of compliance with the fundamental principles in helping IPs to meet their responsibility to act in the public interest.

• Explaining that compliance with the Code means not only compliance with the letter of the Code but also its spirit.

• Clarifying that compliance with the Code in itself does not mean an IP will have met their responsibility to act in the public interest.

• A new requirement for IPs to have ‘an inquiring mind’ when applying the conceptual framework, such that they consider the source, relevance and sufficiency of information obtained taking into account the nature, scope and outputs of the professional activity being undertaken and being alert to a need for further investigation or other action. See paragraphs (2111.5 A1 – 2111.5 A3) (111.5 A1 – 111.5 A3).

• Strengthening the fundamental principle of integrity by emphasising the importance of having the ‘strength of character’ to act appropriately, highlighting that it is not always easy to do the right thing. The revised Code recognises that IPs face pressures which could lead to them to compromise ethical principles and that they need strength to act appropriately even in difficult circumstances.

• Strengthening the principles of objectivity, professional competence and due care and professional behaviour, including some enhancements that reflect the impact of technology.

• Emphasising the importance of being aware of bias in the exercise of professional judgment. See paragraphs (2117.3 A1 – 2117.3 A3) (117.3 A1 – 117.3 A3) and the list of eight examples of bias which might influence professional judgement.

• Highlighting the importance that a positive internal organisational culture has on the effective application of the conceptual framework and explicitly recognising that IPs have a role in promoting ethical behaviour and culture in their organisations. See paragraphs (2117.4 A1 – 2117.4 A3) (117.4 A1 – 117.4 A3).

Technology

The revised Code responds to the impact of technological advancements and digitalisation. The revisions refer to the generic term “technology” to help future proof their relevance but include developments in AI.

The revisions include:

• Strengthening the Code in guiding the mindset and behaviour of IPs when using any technology.

• Providing enhanced guidance fit for the digital age in relation to the fundamental principles of confidentiality, and professional competence and due care, as well as in dealing with circumstances of complexity.

• A new definition of ‘confidential information’.

Consequential amendments

There have been changes to the regulatory landscape which are also reflected in the Code. ICAEW and ICAS have withdrawn from being a regulating body in the Republic of Ireland, revoking their prescribed accountancy body status. In addition, Chartered Accountants Ireland have withdrawn as a recognised professional body under the Insolvency Act 1986 in the UK. As a result, (section 2540) (section 600) Application in the Republic of Ireland has been removed from the revised Code as none of the issuing bodies now operate as regulators of insolvency work in that jurisdiction.

Revised code referencing

The revised Code forms part of a wider Code of ethics for ICAEW and ICAS but is a stand-alone Code of ethics for IPA. As such, the section numbering is different for the RPBs. ICAEW and ICAS have moved their Code of ethics from Part 5 to Part 10 in anticipation of forthcoming changes to the IESBA Code which will introduce sections with specific application to non-insolvency areas.

IPA section numbering drops the 2000 reference (e.g. section 2115 in ICAEW and ICAS revised Code is section 115 in the IPA Code). In addition, the IPA Code does not include the wording of paragraph 2000.7 A1 as it refers to R330.3 and R330.3 B in the ICAEW and ICAS Code of Ethics which the IPA has not adopted.  In all other aspects the wording of the revised Code across the RPBs is identical.

 *IPA reference

*ICAEW / ICAS reference

Please note that only differences in the below documents are references numbers.