Structure of the Code

  • Structure of the Code

    Project Status

    This is an active initiative.

    Staff

    Elizabeth Higgs

    Task Force

    Don Thomson (Chair)

    Tony Bromell

    Brian Caswell

    Peter Hughes 

    Stefano Marchese

    Wen Zhang

    Objective(s) of project

    The tentative objective of the initiative is to identify and recommend to the Board ways to improve the clarity and usability of the Code thereby facilitating its adoption, effective implementation and consistent application.

    Task Force progress / Board discussions to date

    At its June 2012 meeting the IESBA discussed this topic.

    At its December 2012 meeting the IESBA supported the establishment of a Working Group.

    In February 2013 the Working Group held its initial meeting.

    At its March 2013 meeting the IESBA considered the Working Group's initial status report and draft Terms of Reference.

    At its June 2013 meeting the IESBA approved the terms of reference for the working group formed to advise the board on ways to improve the usability of the Code. The IESBA also supported the working group’s research plan and proposed timeline for the initiative, and provided suggestions for the working group to consider as it undertakes the research.

    At its September 2013 meeting the IESBA received an update on the Structure of the Code Working Group’s preliminary analysis of research findings regarding ways to improve the usability of the Code. Amongst other matters, the IESBA discussed the topics of enhancing the visibility of the Code’s requirements; clarifying responsibility for compliance with the Code’s requirements; simplifying the language in the Code; repackaging parts of the Code; and an electronic Code.

    At its December 2013 meeting the IESBA considered the preliminary report and recommendations of its Structure of the Code Working Group regarding ways to improve the usability of the Code. Among other matters, the IESBA discussed the Working Group’s recommendations with respect to enhancing the visibility of the Code’s requirements; clarifying responsibility for compliance with the Code’s requirements; simplifying the wording in the Code; repackaging parts of the Code; and an electronic Code. The IESBA also considered examples of a possible approach to restructuring the Code.

    At its April 2014 meeting, based on the final report and recommendations of its Structure of the Code Working Group regarding ways to improve the usability of the Code, the IESBA approved a project on restructuring the Code. Among other matters, the IESBA provided further input on the topics of clarifying responsibility for compliance with the Code’s requirements; clarifying the language in the Code; reorganizing parts of the Code; and an electronic Code. 

    At its July 2014 meeting the IESBA considered a preliminary draft of a consultation paper setting out Task Force proposals for improving the clarity and structure of the Code. Among other matters, the IESBA discussed the approach to coordinating a review of safeguards in the Code with the work on restructuring the Code; the approach to clarifying responsibility for compliance with the Code in particular circumstances; alignment of the timing of deliverables on other projects in progress with the restructuring work; and general structuring and reorganization matters.

    At its October 2014 meeting, the IESBA unanimously approved the Consultation Paper Improving the Structure of the IESBA Code (CP). The CP sets out approaches that could be taken to improve the clarity and usability of the Code through revising its structure, thereby facilitating its adoption, effective implementation and consistent application. Among other matters, the CP is seeking stakeholders’ input on restructuring the Code by more clearly distinguishing requirements from guidance; reorganizing the content of the Code, including rebranding the Code, or parts thereof, as international standards; use of language in drafting the Code; and identification of a firm’s or an individuals’ responsibility for compliance with the Code in particular circumstances to facilitate compliance and enforcement. The CP includes some illustrative examples of how a restructured layout might be presented. 

    Next Steps

    The CP is expected to be released by early-November 2014 and will be open for public comment through early-February 2015.

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