APES 110 Code of Ethics for Professional Accountants: a plain-English guide

APES 110 is the Code of Ethics for Professional Accountants (including Independence Standards) that governs the conduct of accountants in Australia. It is issued by the Accounting Professional and Ethical Standards Board (APESB) and sets out five fundamental ethical principles, a conceptual framework for identifying and dealing with threats to those principles, and detailed independence requirements for audit and assurance work. Membership of CPA Australia, Chartered Accountants ANZ or the IPA makes compliance with the Code a binding professional obligation, not an optional best practice.

This guide explains what APES 110 covers, who it binds, the substance of its rules, and the practical steps for staying compliant. It is a reference to the obligation captured at /obligations/apes-110-code-of-ethics.

What APES 110 is

APES 110 is a professional ethical standard, not legislation. It is built on the International Code of Ethics issued by the International Ethics Standards Board for Accountants (IESBA), with Australian-specific additions identified by the prefix "AUST". APESB compiles and reissues the Code periodically as international and local revisions take effect, so members should always work from the current compiled version on the APESB website.

Although it is a profession-issued standard, APES 110 has real legal weight. Auditor independence requirements interact with the *Corporations Act 2001* and ASIC's expectations, and the Tax Practitioners Board's Code of Professional Conduct overlaps with several principles for registered agents. Breaching APES 110 can lead to professional disciplinary action, loss of membership and, where statutory duties overlap, regulatory consequences.

Who APES 110 applies to

The Code applies to members of the three professional accounting bodies that adopt it. In practice that means:

• Members in public practice — accountants providing audit, assurance, advisory, tax or other professional services to clients.
• Members in business — accountants employed in industry, government, the not-for-profit sector or academia.
• Firms and networks — the Code extends to firms and, for independence purposes, network firms.

Members practising in Australia or overseas must comply with the Code unless they are prevented from doing so by applicable laws or regulations. The Code applies regardless of seniority, and many obligations apply equally to a graduate accountant and a managing partner.

The five fundamental principles

The heart of APES 110 is five fundamental principles that every member must observe at all times:

These principles are deliberately broad so they apply across the full range of accounting activities. They are not ranked — a member cannot trade one off against another.

The conceptual framework and threats

Rather than listing every prohibited act, APES 110 uses a conceptual framework. Members must identify, evaluate and address threats to compliance with the fundamental principles. The Code groups threats into recognisable categories:

• Self-interest — a financial or other interest influencing judgement.
• Self-review — evaluating your own previous work or that of your firm.
• Advocacy — promoting a client's position to the point objectivity is compromised.
• Familiarity — a long or close relationship making you too sympathetic to a client's interests.
• Intimidation — actual or perceived pressure deterring objective action.

Where a threat is not at an acceptable level, the member must apply safeguards to eliminate or reduce it, or decline or end the engagement. The framework requires the member to consider whether a "reasonable and informed third party" would conclude that compliance is not compromised — a useful test to document in your file.

Independence and the NOCLAR requirements

For audit, review and other assurance engagements, APES 110 imposes independence requirements that go beyond the general principles. These cover, among other things, financial interests, business relationships, employment with assurance clients, fee dependency, long association of personnel (including partner rotation), and the provision of non-assurance services to audit clients. Independence has two dimensions — independence of mind and independence in appearance — and both must be maintained.

The Code also addresses non-compliance with laws and regulations (NOCLAR). When a member becomes aware of actual or suspected non-compliance by a client or employer, the Code sets out a structured response: understand the matter, discuss it with the appropriate level of management or those charged with governance, seek to have it rectified, and consider whether further disclosure is needed. This sits alongside, and does not displace, any separate statutory reporting duties — for example obligations under AML/CTF law or the tax practitioner regime.

Recent revisions to APES 110 have also strengthened the ethical expectations applying to tax planning and related services, reinforcing that members must consider the broader public interest, not just technical compliance, when advising on aggressive arrangements. Confirm the operative date and detail of any tax-planning amendments against the current compiled Code, as APESB phases such changes in over time (verify the current effective date with APESB).

What you need to do to comply

For most firms and accountants, practical compliance means:

• Use the current Code. Work from the latest compiled version and track APESB revisions, especially around independence and tax planning.
• Apply the framework, not just a checklist. For each engagement, identify threats, evaluate their significance and document the safeguards applied.
• Manage independence actively. Maintain a client and interests register, run independence declarations, and monitor fee dependency and partner rotation for assurance clients.
• Have a NOCLAR pathway. Set out, in your quality management policies, how staff escalate suspected non-compliance.
• Train and refresh. Build ethics and independence into induction and ongoing CPD so obligations are understood at every level.
• Document decisions. Contemporaneous file notes on threats, judgements and safeguards are your best evidence if conduct is later reviewed.

Common pitfalls

• Treating the principles as aspirational. They are mandatory; "professional behaviour" includes complying with law, not merely avoiding embarrassment.
• Overlooking the appearance of a conflict. Independence in appearance can be breached even where the member acted with integrity.
• Self-review creep. Providing non-assurance services to an audit client without assessing the self-review threat is a recurring problem area.
• Assuming confidentiality never yields. Confidentiality is qualified — there are circumstances where disclosure is permitted or required by law.
• Relying on an outdated version. APES 110 changes; using a superseded compilation can mean missing tightened independence or tax-planning rules.
• No paper trail. Where threats were identified and addressed but never recorded, the firm cannot demonstrate compliance after the fact.

Used well, APES 110 is less a list of prohibitions than a disciplined way of thinking through ethical risk. Embedding its conceptual framework into engagement acceptance, file documentation and quality management is the most reliable route to compliance.