LEGAL REGULATION OF AUDIT ACTIVITY: THE INTERNATIONAL CODE OF ETHICS AS A QUASI-SOURCE OF FINANCIAL LAW

Abstract

The article is devoted to the analysis of the legal status of the International Code of Ethics for Professional Accountants (including the International Independence Standards) within the legal framework governing audit activities in Ukraine. The author examines the extent to which the International Code of Ethics, which does not have the status of a normative legal act in Ukraine, can be regarded as a quasi-source of law—that is, an instrument that is not formally part of the legislation but in practice regulates the conduct of audit professionals. The article provides a detailed analysis of legislative references to the International Code of Ethics, in particular in the Law of Ukraine "On Audit of Financial Statements and Auditing Activities", which explicitly requires auditors and audit firms to comply with the provisions of the Code. The concept of a quasi-source of law is explained, and its application to the International Code is substantiated through its implementation in the system of public regulation of the auditing profession. Particular attention is paid to the application of the Code in quality control inspections, in the disciplinary practice of professional oversight bodies, and in using its provisions as a benchmark for assessing auditors’ professional conduct. The article analyses legal risks arising from the lack of formal legal status of the Code and the absence of an official body responsible for interpreting its provisions. The author proposes ways to improve legal regulation, including: granting the Code official status in national legislation; designating an authorized interpretive body; and developing an official commentary adapted to the Ukrainian legal context. The article has both theoretical and practical relevance for improving the ethical regulatory framework in audit, enhancing legal certainty, and strengthening public confidence in the results of audit engagements..