IESBA eNews: April 2013

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    Apr 03, 2013
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    IESBA eNews: April 2013

    Thank you for signing up to receive eNews from the International Ethics Standards Board for Accountants (IESBA). This edition of IESBA eNews provides a summary of decisions made at the IESBA’s meeting held March 11-13, 2013, in New York, USA. See the Meeting Page for the meeting highlights, including a podcast summary, and agenda papers.

    IN THIS ISSUE:

    1. Responding to a Suspected Illegal Act
    2. Long Association of Senior Personnel (Including Partner Rotation) with an Audit Client
    3. Review of Part C of the Code
    4. Structure of the Code
    5. Definition of Those Charged with Governance
    6. Emerging Issues and Outreach
    7. Non-Assurance Services
    8. Next Meetings
    9. EC Statutory Audit Directive vs. IESBA Code: FEE Compares Independence Requirements
    10. IESBA is Hiring
    11. 2013 IESBA Handbook
    12. World Congress of Accountants 2014 to be Held in Rome; Sponsorship Opportunities Available

     

    1. Responding to a Suspected Illegal Act

    The IESBA considered the significant comments received from over 70 respondents on its Exposure Draft (ED), Responding to a Suspected Illegal Act. Topics discussed included: disclosure of a suspected illegal act to an appropriate authority; disclosure to the external auditor; right with an expectation to disclose to an appropriate authority; the “public interest” reporting test and escalation threshold; the requirement to confirm or dispel the suspicion; types of suspected illegal acts to be disclosed; and the interaction of the proposed standard with the International Standards on Auditing (ISAs).

    The IESBA will continue its consideration of key issues and future actions at its June 2013 meeting.

     

    2. Long Association of Senior Personnel (Including Partner Rotation) with an Audit Client

    The IESBA received an update on the project to review the long association provisions in Section 290 of the Code of Ethics for Professional Accountants (the Code) to ensure that they continue to provide robust and appropriate safeguards against the familiarity and self-interest threats arising from long association with an audit client. Among other matters, the IESBA discussed the approach to research into the partner rotation provisions in major jurisdictions and canvassing the views of stakeholders on the threats associated with long association.

     

    3. Review of Part C of the Code
    The IESBA approved a proposal to commence a project to review Part C of the Code addressing professional accountants in business (PAIBs) to ensure that the provisions in that part of the Code are robust and remain appropriate. Phase I of the project will review Sections 300, 320, 330, and 340 of the Code. This phase will, in particular, address pressure by superiors and others to engage in unethical or illegal acts, the responsibility of PAIBs to produce financial reports that are faithful representations of the economics of transactions, and associated matters. Phase II of the project will address Section 350, which is related to facilitation payments and bribes. The IESBA will discuss the project further at its June 2013 meeting.

     

    4. Structure of the Code

    The IESBA considered draft terms of reference for, and an initial status report from, the working group formed to advise the Board on ways to improve the readability, understandability, and accessibility of the Code. Among other matters, the IESBA discussed the objectives, scope, and timing of the initiative, as well as the approach to the work. The board agreed that careful thought should be given to distinguishing clearly between options that could be considered on a short term basis and longer term options that could address a more fundamental review of the structure of the Code. The board asked the working group to explore these options and to undertake the research to support the way forward.

     

    5. Definition of Those Charged with Governance

    The IESBA considered significant comments received on its ED of a proposed change to the definition of the term “those charged with governance.” The IESBA agreed in principle to amend the proposed definition in the light of respondents’ significant comments. The IESBA will consider the final definition for approval at its June 2013 meeting after consulting with its Consultative Advisory Group (CAG) on the meaningful ED comments in April 2013.

     

    6. Emerging Issues and Outreach

    The IESBA agreed to the establishment of an Emerging Issues and Outreach Working Group to advise the board on emerging issues and international developments of relevance to the IESBA’s work, and on the board’s strategy for outreach. The IESBA will consider draft terms of reference for the Working Group at its June 2013 meeting.

     

    7. Non-Assurance Services

    The IESBA received a brief update on the Task Force’s approach to information gathering for purposes of scoping out the project. The IESBA will consider the information gathered and the Task Force’s proposals regarding the scope of the project at the June 2013 IESBA meeting.

     

    8. Next Meetings

    Meetings of the IESBA and the IESBA CAG are open to the public. The IESBA CAG will next meet in New York, USA on April 10, 2013. The next IESBA meeting will be held in New York, USA, on June 10–12, 2013.

    For more information and to register to attend an IESBA or IESBA CAG meeting as an observer, visit IESBA Meetings  or IESBA CAG Meetings respectively.

     

    9. EC Statutory Audit Directive vs. IESBA Code: FEE Compares Independence Requirements

    In a study released in February 2013, the Fédération des Experts Comptables Européens (FEE) compared provisions in the EU frameworks on auditor independence (the 2006 Statutory Audit Directive and the 2002 Recommendation on Statutory Auditor’s Independence in the EU) and the Independence provisions of the IESBA Code.

    Among other matters, the study found that the Code is more robust with respect to audits of public interest entities.  In particular, the Code includes strict provisions for those non-audit services that are incompatible with the provision of audit services. The study also found that the Code tackles other matters that may be considered for inclusion in future EU audit legislation.

     

    10. IESBA is Hiring

    The IESBA is searching for a technical manager to join its staff team based in New York. Qualified candidates should have experience at the manager or senior manager level in professional practice, a professional accounting body, the office of a public sector auditor, or similarFor a complete job description and required skills and experience, see Working at IFAC. Qualified candidates should send a resume to jobs@ifac.org

     

    11. 2013 IESBA Handbook

    The IESBA is developing the 2013 Handbook of the Code of Ethics for Professional Accountants. It will contain the final pronouncements addressing breaches of provisions in the Code and conflicts of interest, and the revised definition of “engagement team.” The 2013 Handbook is expected to be released in the second quarter of 2013. For the current edition, see 2012 IESBA Handbook.   

     

    12. World Congress of Accountants 2014 to be Held in Rome; Sponsorship Opportunities Available

    The next World Congress of Accountants (WCOA) will be hosted by the Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (CNDCEC) in Rome, Italy in 2014. Themed 2020 Vision: Learning from the Past, Building the Future, the 2014 WCOA will be held November 10-13 at the Auditorium Parco della Musica. More than 4,000 professionals from all over the world will convene at this IFAC event, which is held every four years. WCOA 2014 will look back to explore the evolution of the accountancy profession and forward to showcase the innovations that will shape the future of the profession.

     

    The WCOA also provides a global platform for organizations and firms to share their projects and visions via various sponsorship opportunities. For more information, please contact info@wcoa2014rome.com or Dimarco@wcoa2014rome.com.

     

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