IFAC revises ethics code.

The International Federation of Accountants has revised its Code of Ethics for Professional Accountants. The revisions to the IFAC code, which was first published in 1990, are the result of discussions held at the IFAC ethics forum in Paris, France, in March.

The revised code is divided into three sections that cover issues relating to (1) all accountants, (2) accountants in public practice and (3) accountants in industry, commerce, the public sector and education. John Gruner, IFAC director general, said the code must be "applicable to all accountants to be credible." He said the revisions to include accountants in industry and commerce were particularly important for a profession in which only 40% work in public practice.

The ethics code now includes a section on auditor independence and rotation issues. It encourages accountants in public practice to rotate senior personnel serving on long-term engagements. The code says the use of the same auditor on a prolonged engagement could cause the perception of a lack of independence.

Also new is a section on second opinions and their effect on an auditor's objectivity. The code requires accountants who are asked to give a second opinion to communicate with the original or existing accountant and to gain access to all relevant information about the client. According to the ethics code, the objectivity' of the opinion could be challenged if the second opinion was given without full and proper facts. Also, the judgment of the accountant who requested the second opinion could be in question if he or she was subsequently appointed by the company.

Copies of Code of Ethics for Professional Accountants is available for $10 each by contacting the IFAC order department at [phone].

FYI 

* President Bill Clinton has proposed a flex-time plan that would allow employees to receive time off instead of cash for overtime work. Employees could use the time by giving their employers two weeks' notice; companies would have written policies to prevent abuse.

* The National Association of State Boards of Accountancy has filed a friend-of-the-court brief supporting Florida's case against American Express. Last year Amex argued successfully on First Amendment grounds that one of its employees should be allowed to inform clients he is a CPA. However, NASBA and the Florida Board of Accountancy are arguing that the case is really about the right to practice public accounting.

* Comerica Bank's recession watch index forecast the likelihood of a national recession in the next 12 months as 42% probable in June and 32% in July. The index, which has not gone over 50% in the past year, is based on spread in the yield curve, adjusted bank reserve growth and the Commerce department's index of leading indicators.