• 2015 Handbook of the Code of Ethics for Professional Accountants

    The 2015 IESBA Handbook contains the entire Code of Ethics for Professional Accountants (the Code). The Code is currently effective with the exception of "Changes to the Code—Certain Non-assurance Services Provisions for Audit Clients and Assurance Clients." These changes will be effective April 15, 2016. See Handbook for details.

    IESBA
    English

  • IESBA eNews: June 2015

    English

    Thank you for signing up to receive eNews from the International Ethics Standards Board for Accountants® (IESBA®, the Ethics Board). This edition provides a summary of topics discussed and decisions made at the last Ethics Board meeting, held April 13–15, 2015, in New York, New York, USA. See the Meeting Page for highlights, including a podcast summary and agenda papers. You can also subscribe to our podcast channel in iTunes and follow us on Twitter @Ethics_Board.   

    2015 Handbook of the Code of Ethics for Professional Accountants

    The 2015 edition of the Handbook of the Code of Ethics for Professional Accountants is now available. Print copies can be purchased for USD $65 with discounts available for educators, students, and purchasers from WTO developing countries.

    The 2015 edition of the handbook includes the revisions addressing certain non-assurance services for audit clients in Section 290, and assurance clients in Section 291. The changes will be effective on April 15, 2016, except for the changes to Section 290, which will be effective for audits of financial statements for periods commencing on or after April 15, 2016. Early adoption is permitted. See “Changes” section in Handbook for details.

    For information on recent developments and pending changes to the Code issued subsequent to May 31, 2015, visit the IESBA’s website, in particular, Exposure Drafts and Standards & Pronouncements.

    To access the web-based IESBA Handbook for personal use or purchase print copies, see Handbook of the Code of Ethics for Professional Accountants.

    Responding to Non-Compliance with Laws & Regulations

    The IESBA unanimously approved for exposure revised proposals regarding professional accountants’ response to identified or suspected acts of non-compliance with laws and regulations. The revised proposals set out a new framework to guide auditors, professional accountants in public practice, and professional accountants in business (PAIBs) in deciding how best to act in the public interest in such situations.

    Comments on the revised proposals in the Exposure Draft are requested by September 4, 2015. All stakeholders are invited to comment, particularly preparers, those charged with governance, and investors. An At-a-Glance document has been prepared by staff to outline the key principles and objectives of the revised proposals. The IESBA will consider the comments received on the Exposure Draft at its December 2015 meeting.

    Structure of the Code

    The IESBA considered comments received on the Consultation Paper, Improving the Structure of the Code of Ethics for Professional Accountants, and related Task Force recommendations. The IESBA broadly agreed on an approach to restructuring the Code, subject to reconsideration of the titles of certain components within the new structure. The IESBA also discussed, among other matters: how to give appropriate prominence to compliance with the fundamental principles and application of the conceptual framework; rebranding of the Code as standards; distinguishing requirements from guidance; the risk of unintended changes in meaning due to restructuring; and numbering conventions. The IESBA agreed to seek early engagement with stakeholders as the restructuring work progresses.

    The IESBA will consider a first draft of a selection of restructured sections of the Code at its June-July 2015 meeting.

    To enhance accessibility and navigability, the Code is now available in a new web-based format. Enhancements to the web-based Code are being considered in tandem with the restructuring.

    Long Association of Personnel with an Audit or Assurance Client

    The IESBA completed its consideration of comments received on the Exposure Draft, Proposed Changes to Certain Provisions of the Code Addressing the Long Association of Personnel with an Audit or Assurance Client. Topics discussed included: restrictions on the activities of key audit partners with respect to the audited entity during the cooling-off period; obtaining the concurrence of those charged with governance with respect to the application of certain exceptions to rotation requirements; and enhancements to the general provisions regarding the threats created by long association.

    The IESBA also discussed issues concerning audits of public interest entities (PIEs):

    • Whether the existence of different regulatory safeguards, or a package of safeguards, set at the jurisdictional level might provide an alternative to elements in the Code regarding rotation requirements for PIE audits; and
    • The approach to the cooling-off period for the engagement quality control reviewer on PIE audits.

    The IESBA will continue its deliberation of the issues at its June-July 2015 meeting, taking into account further input to be received from the IESBA Consultative Advisory Group (CAG).

    Review of Safeguards in the Code

    The IESBA considered preliminary issues in relation to the clarity, appropriateness, and effectiveness of the safeguards pertaining to the application of the conceptual framework in the Code, including:

    • the approach to describing the meaning of a safeguard;
    • characteristics of a reasonable and informed third party;
    • the meaning of materiality in evaluating the significance of threats;
    • evaluating the effectiveness of safeguards; and
    • the nature and extent of involvement of those charged with governance regarding the provision of non-assurance services by the auditor.

    In addition, the IESBA considered the approach to coordination between this project and the Structure of the Code project. The IESBA agreed that any changes to the Code proposed as a result of the Safeguards project should be issued for exposure in the format and under the drafting conventions of the restructured Code.

    The IESBA will continue its deliberation of the issues at its June-July 2015 meeting.

    Review of Part C of the Code—Phase II

    The IESBA discussed a number of matters regarding Phase II of its project to enhance Part C of the Code, which deals with PAIBs. The Task Force presented its preliminary analysis of Section 350 of the Code, which identified where potential improvements could be made to provide more robust and comprehensive guidance to PAIBs on the topic of inducements.

    At its June-July 2015 meeting, the IESBA will consider comments received on the Exposure Draft of Phase I of the project, addressing PAIBs’ responsibilities with respect to the presentation of information, and pressure to breach the fundamental principles. The IESBA will continue its deliberation of the issues on Phase II of the project in due course.

    Non-Assurance Services

    Following the Public Interest Oversight Board’s approval that due process had been followed, the IESBA released in April 2015 the final pronouncement, Changes to the Code Addressing Certain Non-Assurance Services Provisions for Audit and Assurance Clients. The changes strengthen the independence provisions in the Code by, in particular, no longer permitting auditors to provide certain prohibited non-assurance services to PIE audit clients in emergency or other unusual situations, and ensuring that they do not assume management responsibility when providing non-assurance services to audit clients.

    In addition, the revised provisions include:

    • New and clarified guidance regarding what constitutes management responsibility; and
    • Clarified guidance regarding the concept of “routine or mechanical” services relating to the preparation of accounting records and financial statements for audit clients that are not PIEs.

    See the staff-prepared Basis for Conclusions. The revised pronouncement is included in the 2015 IESBA Handbook; see above. 

    Follow the Latest Ethics Resources, News, and Discussions in Global Knowledge Gateway

    Last year, the International Federation of Accountants® (IFAC)® launched the Global Knowledge Gateway™, a digital hub for the global accountancy profession. The Gateway serves professional and aspiring accountants in all sectors by providing streamlined access to relevant resources, news, discussions, and thought leadership in ten different areas, including ethics. Resources in this area, designed to serve both accountants in business and in practice, include surveys and reports on business ethics issues, as well as practical guidance on implementing the IESBA Code and other codes of conduct.

    We invite you to explore, contribute your views and recommendations, suggest new resources, and subscribe to The Latest to receive customized twice-monthly updates on new ethics and other content added to the Gateway. Register and subscribe to take full advantage of these features. 

    Next Meetings

    Meetings of the Ethics Board and the Ethics Board’s CAG are open to the public. The next Ethics Board meeting will be held in New York, USA, on June 29–July 1, 2015. The next physical IESBA CAG meeting will be held in New York, USA, on September 14, 2015.

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

    IESBA Is Hiring

    The IESBA is recruiting at the Deputy Director and Senior Technical Manager levels for its staff team based in New York. For complete job descriptions and required skills and experience for these roles, see Working at IFAC. Qualified candidates should send their resume to jobs@ifac.org.

    Are You Getting the Most out of the IFAC Website?

    Register or log in to the IFAC website and visit My Subscriptions to update your preferences. You may also be interested in subscribing to The Latest from the Global Knowledge Gateway, which includes discussions, resources, and news on ethics, audit & assurance, and related topics, as well as subscribing to receive updates from the IAASB, IAESB, IPSASB, and IFAC Committees. You can unsubscribe or update your preferences at any time. 

    By registering on the IFAC website, you can also:

  • Ki-Tae Park

    Job Title

    IESBA Technical Advisor for Sung-Nam Kim

    Country

    Korea

    Kitae is a partner of the PwC in Korea, based in Seoul.  He has 30 years of extensive experience in financial industry to assist Korean big companies in various areas including audit, IFRS implementation and accounting advisory. Kitae has a solid knowledge of IFRS and US GAAP and has extensive experience in assisting Korean companies raising capital overseas. He has spent two years in US (Los Angeles) from 1996~1997 for overseas experiences.

    As a partner in Banking assurance group currently, He is responsible for all aspects of the services with respect to IFRS conversion, including but not limit to, assisting in overall project management, providing technical support for GAAP differences identification, IFRS conversion and financial statements disclosures, establishing new conversion business processes and designing the new IT system for conversion procedures., as well as evaluating and implementing new rules under IFRS.

    The clients Kitae served include, but not limited to, Kookmin Bank, Shinhan financial group, Korea Telecom, LG Display all of which are SEC registrants, LG Electronics and LG U+.

  • IESBA Refuerza las Provisiones de Independencia del Auditor; Limita Aún más las Excepciones y Aclara la Guía Sobre Servicios Diferentes al Aseguramiento

    Nueva York, Nueva York
    Spanish

    El Consejo de Normas Internacionales de Ética para Contadores® (IESBA®, Consejo de Ética) ha publicado los Cambios al Código sobre ciertas provisiones de servicios diferentes al aseguramiento para clientes de auditoría y aseguramiento. Los cambios perfeccionan las provisiones de independencia estipuladas en el Código de Ética para Contadores Profesionales™ (el Código), en particular, impidiendo a los auditores brindar ciertos servicios prohibidos -diferentes al aseguramiento- a aquellos clientes de auditoría de entidades de interés público en situaciones de emergencia, y garantizando que no asuman responsabilidades administrativas al brindar servicios diferentes al aseguramiento a sus clientes de auditoría.

    "La independencia del auditor es fundamental para la confianza pública en la auditoría externa", señaló el presidente del IESBA, el doctor Stavros Thomadakis. "Estas mejoras no solo reforzarán la independencia, sino que también promoverán mayor consistencia en la aplicación de las provisiones del Código en las más de cien jurisdicciones del mundo, donde el Código está en uso".

    Entre las revisiones se eliminaron las provisiones que permitían a una firma de auditoría brindar determinados servicios de contabilidad e impuestos a clientes de auditoría de entidades de interés público en situaciones de emergencia, pues eran susceptibles de caer en una interpretación demasiado general. Adicionalmente, las provisiones revisadas incluyen:

    • Una nueva guía clarificada sobre lo que constituye la responsabilidad administrativa, y
    • Una guía clarificada sobre el concepto de servicios "mecánicos y rutinarios" relacionados con la creación de registros contables y preparación de estados financieros para clientes de auditoría que no son entidades de interés público.

    Las revisiones incluyen igualmente cambios correspondientes a las provisiones de servicios diferentes al aseguramiento del Código en relación con otros clientes de aseguramiento.

    "Estos cambios se enfocan en unas pocas, pero importantes, áreas del Código. Sin embargo, la junta continúa explorando otras áreas que podrían requerir mejoras", indicó el Director Técnico del IESBA, Ken Siong. "Por consiguiente, la junta ha creado un nuevo proyecto que revisará la claridad, pertinencia, y efectividad de las garantías relativas a la independencia del auditor en el Código, particularmente teniendo en cuenta que éstas se relacionan con la provisión de servicios diferentes al aseguramiento para clientes de auditoría".

    Para acceder al pronunciamiento revisado, visita el sitio web del IESBA: www.ethicsboard.org. Los cambios entrarán en vigor a partir del 15 de abril de 2016, con la posibilidad de una adopción temprana. Para mayor detalle, referirse al pronunciamiento final.

    Acerca del IESBA
    El International Ethics Standards Board for Accountants es un consejo independiente de emisión de estándares que desarrolla y emite -en el interés público- estándares de ética de alta calidad y demás declaraciones para los contadores profesionales alrededor del mundo. A través de sus actividades, el IESBA desarrolla el Código de Ética para Contadores Profesionales, el cual establece los requerimientos éticos para contadores profesionales. Las estructuras y los procesos que soportan las operaciones del IESBA son facilitados por la IFAC. Visítanos en www.ethicsboard.org para mayor información.

    Acerca de la IFAC
    La IFAC es la organización global para la profesión contable, dedicada a servir el interés público a través del fortalecimiento de la profesión y contribuir en el desarrollo de economías internacionales sólidas. La IFAC se compone de 175 miembros y asociados en 130 países y territorios, representando aproximadamente a 2,5 millones de contadores en la práctica pública, la educación, el gobierno, la industria y el comercio.

    IESBA Reinforces Auditor Independence Provisions; Further Limits Exceptions and Clarifies Guidance Around Non-Assurance Services

  • IESBA Progresses toward Global Standard on Responding to Non-Compliance with Laws and Regulations; Issues Revised Proposal

    New York, New York English

    The International Ethics Standards Board for Accountants® (IESBA®, the Ethics Board) today released for re-exposure an enhanced standard, Responding to Non-Compliance with Laws and Regulations. The proposed standard sets out a new framework to guide auditors, other professional accountants in public practice, and professional accountants in business (PAIBs) in deciding how best to act in the public interest when they come across an act or suspected act of non-compliance with laws and regulations.

    “Fundamentally, all professional accountants have an ethical responsibility to respond in these situations and not turn a blind eye to them,” commented IESBA Chairman Dr. Stavros Thomadakis. “Importantly, their response can play a role in ensuring that serious instances of non-compliance with laws and regulations are appropriately addressed, or in deterring them. The board intends the proposed framework to guide professional accountants’ response in these situations, ensuring their actions serve the public interest while recognizing the essential role of management and those charged with governance in addressing the issue.”

    Among other matters, the proposed standard serves to better equip auditors and other professional accountants to address such issues by providing a pathway to disclosure to an appropriate authority in appropriate circumstances without the duty of confidentiality under the Code of Ethics for Professional Accountants™ acting as a barrier. It also places renewed emphasis on the importance of senior-level PAIBs promoting a culture of compliance with laws and regulations within their organizations.

    “The board believes that the proposed framework represents a holistic, proportionate, and balanced model for addressing what can often be complex situations,” noted IESBA Technical Director Ken Siong. “The board also believes that the proposed standard’s enhanced guidance will support and complement legal and regulatory frameworks in jurisdictions that already mandate reporting by professional accountants of identified or suspected non-compliance with laws and regulations to appropriate authorities.”

    The development of the proposed standard was informed by stakeholder responses to the first Exposure Draft issued in August 2012 and other extensive consultation with stakeholders, including global roundtables in Hong Kong, Brussels, and Washington, DC in 2014, and discussions with the IESBA Consultative Advisory Group.

    For an overview of the proposed standard, see the At-a-Glance document.

    How to Comment
    The Ethics Board invites public comment on the Exposure Draft and, in particular, from regulators and audit oversight bodies, preparers, those charged with governance, investors, accounting firms, and all other stakeholders who have a role or interest in addressing the relevant issues. National and regional professional accountancy organizations also are invited to share the ED and encourage participation from their members and employees. To access the ED and submit a comment, please visit the Ethics Board’s website at www.ethicsboard.org. Comments are requested by September 4, 2015. 

    About the IESBA
    The International Ethics Standards Board for Accountants (IESBA) is an independent standard-setting board that develops and issues, in the public interest, high-quality ethical standards and other pronouncements for professional accountants worldwide. Through its activities, the IESBA develops the Code of Ethics for Professional Accountants, which establishes ethical requirements for professional accountants. The structures and processes that support the operations of the IESBA are facilitated by IFAC. Please visit www.ethicsboard.org for more information.

    About IFAC
    The International Federation of Accountants® (IFAC®) is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised more than 175 members and associates in 130 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

  • Exposure Draft, Responding to Non-compliance with Laws & Regulations

    The proposed standard sets out a new framework to guide auditors, other professional accountants in public practice, and professional accountants in business (PAIBs) in deciding how best to act in the public interest when they come across an act or suspected act of non-compliance with laws and regulations. 

    Published:
    | May 6, 2015
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