This comprehensive review of anti-corruption corporate reporting by the largest publicly traded companies worldwide decodes the current state of anti-corruption reporting practices and highlights the urgent need for enhanced quality, reliability, and comparability in this crucial area. It also raises a series of policy questions around jurisdictional differences, comparability, governance, and the completeness and reliability of the information provided.
The IFAC Small- and Medium- Practices Advisory Group (SMPAG) welcomes the opportunity to provide input to the International Ethics Standards Board for Accountants (IESBA) Exposure Draft on the proposed revisions to the Code addressing tax planning and related services.
This tool will help professional accountancy organizations take leading roles in the anti-corruption fight in their jurisdictions. Global Fight, Local Actions: Anti-Corruption Advocacy Workbook for PAOs equips PAOs and accountancy profession leaders with the background and framework to craft bespoke approaches and messages that best fit their jurisdiction and needs.
The SMPAG supports the IAASB’s principles-based approach and limited number of requirements. We recognize the importance of the IAASB reacting to changes in the environment, including with advancements in different technologies being used both by auditors and entities they are auditing. We support the fact that ISA 500 (Revised) should apply to all information intended to be used as audit evidence, irrespective of its source. We also agree with the clarification that not all information is itself audit evidence.
As the IAASB will be aware, in its response to the ISA for LCE Exposure Draft and in multiple other letters, the SMPAG raised strong concerns in relation to group audits being excluded from the standard and the impact this could have on severely limiting its use. It therefore welcomes the IAASB reconsidering its decision and developing proposals that address audits of less complex groups. It also support the inclusion as a separate Part 10.
The IESBA Staff has developed the jurisdictional PIE database as a resource to assist regulators, national standard setters, and other relevant bodies in developing or revising their definitions of PIE at the local level based on the IESBA’s PIE definition. This database covers 78 jurisdictions in the Americas, Europe, Africa, Asia, and Oceania.
Among other things, the PIE revisions:
Expanded the list of PIE categories in the Code, including a new category, “publicly traded entity,” to replace the category “listed entity.”
Recognize the essential role local bodies responsible for the adoption of the Code play in delineating the specific entities that should be scoped in as PIEs in their jurisdictions, encouraging them to properly define the PIE categories in the expanded definition and adding any other categories relevant to their environments.
Introduce a transparency requirement for firms to publicly disclose the application of independence requirements for PIEs where they have done so.
The PIE revisions become effective for audits of financial statements for periods beginning on or after December 15, 2024. Early adoption is permitted and encouraged.
