- Clarification of the provisions in Section 290, Independence—Audit and Review Engagements, addressing management responsibilities;
- Clarification of the concept of “routine and mechanical” services relating to the preparation of accounting records and financial statements; and
- A review of the emergency exception provisions in the Code pertaining to both accounting and bookkeeping services, and taxation services.
IESBA eNews: June 2013 Meeting Summary
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Jun 27, 2013
New York, New York
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IESBA eNews: June 2013 Meeting Summary
Thank you for signing up to receive eNews from the International Ethics Standards Board for Accountants (IESBA, the Ethics Board). This edition of IESBA eNews provides a summary of decisions made at the board’s meeting held June 10-12, 2013, in New York, USA. See the Meeting Page for the meeting highlights podcast, meeting summary, and agenda papers.
IN THIS ISSUE:
1. Responding to a Suspected Illegal Act
2. Definition of Those Charged with Governance
3. Structure of the Code
4. Future Strategy and Work Plan
5. Review of Part C of the Code
6. Provision of Non-Assurance Services to an Audit Client
7. Long Association of Senior Personnel (Including Partner Rotation) with an Audit Client
8. Emerging Issues and Outreach
9. Next Meetings
10. Ethics Board is Hiring
11. 2013 IESBA Handbook
12. Registration Now Open for World Congress of Accountants 2014; Sponsorship Opportunities Available
The Ethics Board considered a proposed alternative to the approach set out in the Exposure Draft, Responding to a Suspected Illegal Act, regarding a professional accountant’s responsibilities when encountering a suspected illegal act. Among other matters, the Ethics Board discussed the concept of a permission in the Code of Ethics for Professional Accountants (the Code) for both professional accountants in public practice and professional accountants in business to override confidentiality in specific circumstances when responding to a suspected illegal act. In addition to considering the various elements of the proposed alternative approach, the Ethics Board discussed the thresholds for actions, the types of suspected illegal acts to disclose, and documentation. The Ethics Board will continue its deliberation of the proposed alternative approach at its September 2013 meeting.
The Ethics Board approved for issuance, subject to confirmation by the Public Interest Oversight Board (PIOB) in September 2013 that due process has been followed, a revised definition of “those charged with governance” and related changes to the Code. The changes will be effective on July 1, 2014.
The Ethics Board approved the terms of reference for the working group formed to advise the board on ways to improve the usability of the Code. The board 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 begins research. The Ethics Board will receive an update on the research at its September 2013 meeting.
The Ethics Board considered the responses to its survey on the 2014-2016 IESBA Strategy and Work Plan. It also considered the Planning Committee’s preliminary analysis of the survey results and recommendations for the way forward. Among other matters, the Ethics Board agreed to extend its 2011-2012 Strategy and Work Plan through the end of 2014. The Ethics Board also identified a short list of topics for possible inclusion in its next Strategy and Work Plan (2015-2017) for further consideration. The board will continue its deliberation on these topics at its September 2013 meeting.
5. Review of Part C of the Code
Discussion around the project to review Part C of the Code, which addresses professional accountants in business (PAIBs), included the application of Part C to all professional accountants and pressure by superiors and others to engage in unethical or illegal acts. Consideration of matters relevant to professional accountants in public practice has been deferred until after PAIB-specific issues have been addressed. The Ethics Board will continue its consideration of pressure issues at its September 2013 meeting.
The Ethics Board considered the findings from a survey of a number of jurisdictions, conducted by the project Task Force, to narrow the scope of the project on non-assurance services. The Ethics Board also considered the Task Force’s recommendations and agreed that the project proposal should be refined to focus on the following:
The Ethics Board also supported the development of a paper with the aim of, among other matters: raising awareness of the Code’s approach to non-assurance services and of the robustness of the related provisions in the Code; highlighting supplementary ways by which the threats and safeguards approach to independence in the Code may be enhanced; and generally increasing the visibility and transparency of the relevant provisions in the Code. The Ethics Board will receive an update on the project at its September 2013 meeting.
The Ethics Board received an update on the project to review the long association provisions in Section 290 of 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. The Ethics Board will consider the findings from the survey and other research being undertaken for this project at its September 2013 meeting.
The Ethics Board approved the terms of reference for the working group formed to advise the board in relation to emerging issues and international developments of relevance to the board’s work and outreach to stakeholders. The Ethics Board will consider at its September 2013 meeting preliminary recommendations from the working group with respect to processes by which the board may consider emerging issues and its strategy for outreach.
Meetings of the IESBA and the IESBA Consultative Advisory Group (CAG) are open to the public. The IESBA CAG will next meet in New York, USA, on September 11, 2013. The next meeting of the IESBA will be in Sydney, Australia, September 16–18, 2013.
The Ethics Board is seeking a technical manager to join its staff team based in New York. Qualified candidates will currently be, or have had experience, at the manager or senior manager level in professional practice, a professional accounting body, the office of a public sector auditor, or similar. For a complete job description and required skills and experience, see Working at IFAC. Qualified candidates should send a resume to email@example.com.
The 2013 Handbook of the Code of Ethics for Professional Accountants is now available to download or purchase. The 2013 edition contains the final revised pronouncements addressing breaches of provisions in the Code and conflicts of interest, and the revised definition of “engagement team.” These changes will be effective in 2014; see the individual pronouncements for details. To place an order for this, in addition to the 2013 handbooks for public sector accounting and auditing and assurance standards, visit Handbook of the Code of Ethics for Professional Accountants.
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 around the world will convene at this quadrennial IFAC event. 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. Register Now.
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 firstname.lastname@example.org or Dimarco@wcoa2014rome.com.