All stakeholders are invited to register and participate

Feb 12, 2020 | New York, New York | English

Today, the International Ethics Standards Board for Accountants^® (IESBA^®) announced the dates for two webinars focused on the recently released Exposure Drafts, with proposals relating to Non-assurance services (NAS) and Fees that further reinforce auditor independence.

Please click below to register and join us for each 60-minute webinar event.

• Tuesday, March 17, 2020 from 8:30 a.m. to 9:30 a.m. EST; Overview of Proposed Revisions to the Non-Assurance Services Provisions of the Code

• Thursday, March 19, 2020 from 10:00 a.m. – 11:00 a.m. EST; Overview of Proposed Revisions to the Fee-Related Provisions of the Code.   

During the March 17 webinar, the NAS Task Force Chair, Mr. Richard Fleck, will explain the key NAS proposals, including:

• A prohibition on providing NAS to an audit client that is a public interest entity (PIE) if a self-review threat to independence will be created;
• Further tightening of the circumstances in which materiality may be considered in determining the permissibility of a NAS;
• Strengthened provisions regarding auditor communication with those charged with governance (TCWG), including, for PIEs, a requirement for NAS pre-approval by TCWG; and
• Stricter requirements regarding the provision of some NAS, including certain tax and corporate finance advice.

During the March 19 webinar, the Fees Task Force Chair Mr. Ian McPhee, will explain the significant aspects of the fee-related proposals which include:

• A prohibition on firms allowing the audit fee to be influenced by the provision of services other than audit to the audit client;
• In the case of PIEs, a requirement to cease to act as auditor if fee dependency on the audit client continues beyond a specified period; and
• Communication of fee-related information to TCWG and to the public to assist their judgments about auditor independence.

Don’t miss out on this unique opportunity to engage with representatives of the IESBA and learn more about the NAS and fee-related proposals.

The IESBA welcomes feedback on the NAS and Fees EDs from all stakeholders, including investors and other users of financial statements, the corporate governance community, the regulatory and audit oversight community, preparers, firms, national standard setters, IFAC member bodies, academics and others.

The comment deadline for the NAS and Fees Exposure Drafts is May 4, 2020.

If you have any questions, please email Szilvia Sramko at szilviasramko@ethicsboard.org.

The International Ethics Standards Board for Accountants (IESBA) today released for public comment the Exposure Draft, Proposed Revision to the Code Addressing the Objectivity of Engagement Quality Reviewers. The proposed limited-scope revision to the International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code) dovetails with the International Auditing and Assurance Standards Board’s (IAASB’s) development of proposed International Standard on Quality Management (ISQM) 2, Engagement Quality Reviews.

The Exposure Draft includes proposed guidance on the application of the conceptual framework in the Code to address the topic of the objectivity of an engagement quality reviewer (EQR), thereby supporting proposed ISQM 2 in addressing the matter of the eligibility of an individual to serve in an EQR role. In particular, the proposed guidance:

• Explains the different types of threat to compliance with the fundamental principle of objectivity that might be created in circumstances where an individual is being considered for appointment as an EQR for a given engagement;
• Sets out factors to consider in evaluating the level of the identified threats; and
• Suggests actions that might be safeguards to address the threats.

The development of the proposal benefited from cooperation with the IAASB within the established coordination framework of the two Boards. The IESBA is proceeding on an accelerated time frame to finalize the proposal in order to align closely with the anticipated finalization of ISQM 2 within 2020.  

Comments on the Exposure Draft are requested by March 16, 2020 from all stakeholders.

About the IESBA

The International Ethics Standards Board for Accountants (IESBA) is an independent global standard-setting board. The IESBA serves the public interest by setting ethics standards, including auditor independence requirements, which seek to raise the bar for ethical conduct and practice for all professional accountants through a robust, globally operable International Code of Ethics for Professional Accountants (including International Independence Standards).

The IESBA believes a single set of high-quality ethics standards enhances the quality and consistency of services provided by professional accountants, thus contributing to public trust and confidence in the accountancy profession. The IESBA sets its standards in the public interest with advice from the IESBA Consultative Advisory Group (CAG) and under the oversight of the Public Interest Oversight Board (PIOB).

The International Ethics Standards Board for Accountants (IESBA) announces the following new appointments and re-appointments:

New appointments:

• Mrs. Laurie Endsley, United States
• Mr. Richard Huesken, United States

Re-appointments:

• Mr. Hiro Fukukawa, Japan
• Ms. Kim Gibson, United States
• Ms. Caroline Lee, Singapore

Re-appointment as Deputy Chair:

• Mr. Richard Fleck, United Kingdom

"I warmly welcome Laurie Endsley and Richard Huesken to the IESBA. I look forward to the rich experience and diverse perspectives they will bring to our discussions, starting with our March 16-18, 2020 meeting in New York. I am also pleased Richard Fleck will continue to serve as Deputy Chair for another year,” said Dr. Stavros Thomadakis, IESBA Chairman. “Finally, I want to thank our departing members, Alden Leung, Patricia Mulvaney and Sylvie Soulier. Their various contributions to the Board have been significant and we are grateful for their dedication to IESBA and their commitment to the public interest."

The IESBA also welcomes two new technical advisors, Ms. Laura Friedrich from Canada, and Ms. Kristen Wydell from Australia.

The International Ethics Standards Board for Accountants^® (IESBA^®) today released two Exposure Drafts (EDs):

• Proposed Revisions to the Non-Assurance Services Provisions of the Code
• Proposed Revisions to the Fee-Related Provisions of the Code

The EDs are aimed at strengthening the non-assurance services (NAS) and the fee-related independence provisions of the International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code). The EDs represent a key milestone in two major strategic commitments of the IESBA in its current strategy and workplan.

Among the key changes proposed to the NAS provisions are:

• A prohibition on providing NAS to an audit client that is a public interest entity (PIE) if a self-review threat to independence will be created;
• Further tightening of the circumstances in which materiality may be considered in determining the permissibility of a NAS;
• Strengthened provisions regarding auditor communication with those charged with governance (TCWG), including, for PIEs, a requirement for NAS pre-approval by TCWG; and
• Stricter requirements regarding the provision of some NAS, including certain tax and corporate finance advice.

The NAS ED also includes enhanced guidance to assist firms in evaluating the level of threats to independence when providing NAS to audit clients. 

Among the key proposed changes to the fee-related provisions are:

•  A prohibition on firms allowing the audit fee to be influenced by the provision of services other than audit to the audit client;
• In the case of PIEs, a requirement to cease to act as auditor if fee dependency on the audit client continues beyond a specified period; and
• Communication of fee-related information to TCWG and to the public to assist their judgments about auditor independence.

The Fees ED also includes enhanced guidance on identifying, evaluating and addressing threats to independence in relation to other fee-related matters, including the proportion of fees for services other than audit to the audit fee.

“Auditor independence, in fact and in appearance, is fundamental to public confidence in the financial statement audit, and in turn in the integrity of the entire financial system,” said IESBA Chairman Dr. Stavros Thomadakis. “Our proposals are a timely response to growing public perceptions about the need to reinforce auditor independence, as well as specific concerns from the regulatory community and the Public Interest Oversight Board, especially in relation to audits of PIEs. The more stringent provisions concerning the offer of NAS to PIE audit clients, as well as  the transparency and other substantive proposals concerning fees, further raise the bar on auditor independence in the public interest.”

The development of the proposals in the two EDs has benefited from cooperation with the International Auditing and Assurance Standards Board (IAASB) within the established coordination framework of the two Boards. The IESBA is strongly committed to continuing its engagement with the IAASB in finalizing the proposals.

The IESBA will host webinars during the comment period to provide an overview of the NAS and Fees EDs. Follow the IESBA on Twitter (@Ethics_Board) for updates on how to register for these events.

The IESBA welcomes feedback on the NAS and Fees EDs from all stakeholders, including investors and other users of financial statements, the corporate governance community, the regulatory and audit oversight community, preparers, firms, national standard setters, IFAC member bodies, academics and others.

How to Comment 

The IESBA invites all stakeholders to comment on the NAS and Fees EDs by visiting the IESBA’s website. Comments are requested by June 4, 2020 (Due to the COVID-19 pandemic the original comment deadline of May 4 has been extended to June 4).

About the IESBA
The International Ethics Standards Board for Accountants (IESBA) is an independent global standard-setting board. The IESBA serves the public interest by setting ethics standards, including auditor independence requirements, which seek to raise the bar for ethical conduct and practice for all professional accountants through a robust, globally operable International Code of Ethics for Professional Accountants (including International Independence Standards).

The IESBA believes a single set of high-quality ethics standards enhances the quality and consistency of services provided by professional accountants, thus contributing to public trust and confidence in the accountancy profession. The IESBA sets its standards in the public interest with advice from the IESBA Consultative Advisory Group (CAG) and under the oversight of the Public Interest Oversight Board (PIOB).