The International Auditing and Assurance Standards Board (IAASB) has released amendments aimed at bolstering transparency and providing auditors with a clear mechanism to action changes to the International Ethics Standards Board for Accountants’ (IESBA) Code of Ethics for Professional Accountants (including International Independence Standards). The IAASB amended International Standard on Auditing 700 (Revised), Forming an Opinion and Reporting on Financial Statements and ISA 260 (Revised), Communication with Those Charged with Governance.

The IESBA Code now requires firms to publicly disclose when a firm has applied the independence requirements for public interest entities in an audit of the financial statements of an entity. The IAASB’s amendments provide a clear and practical framework for implementing this new requirement through appropriate communication in the auditor’s report and with those charged with governance.

Throughout the development of these amendments, the IAASB maintained close collaboration and coordination with IESBA, striving to align key concepts in the IAASB’s and IESBA’s standards, to the greatest extent possible.

About the IAASB
The International Auditing and Assurance Standards Board develops auditing, assurance, related services, and quality management standards and guidance in the public interest that support consistent performance of quality engagements. Along with the International Ethics Standards Board for Accountants, the IAASB is part of the International Foundation for Ethics and Audit. The Public Interest Oversight Board oversees IAASB and IESBA activities and the public interest responsiveness of the standards. For copyright, trademark, and permissions information, please visit Permissions.

The International Ethics Standards Board for Accountants (IESBA) today released the 2023 Handbook of the International Code of Ethics for Professional Accountants (including International Independence Standards). This handbook replaces the 2022 edition and incorporates the following revisions:

• The revisions relating to (a) the definition of engagement team, and (b) group audits. The revisions deal with the independence and other implications of the changes made to the definition of “engagement team” in the Code to align with changes to the definition of the same term in the IAASB’s International Standards on Auditing (ISAs) and International Standards on Quality Management (ISQMs). The revisions also address holistically the various independence considerations in an audit of group financial statements. The revised provisions relating to the definition of engagement team and group audits will be effective for audits of financial statements and audits of group financial statements for periods beginning on or after December 15, 2023. Early adoption of the revisions is encouraged.
• The upcoming expiry of the “jurisdictional provision” addressing long association of personnel with an audit client.  The jurisdictional provision will expire and be no longer available for audits of financial statements for periods beginning on or after December 15, 2023. Under the jurisdictional provision (paragraph R540.20 of the Code), where a legislative or regulatory body (or organization authorized or recognized by such legislative or regulatory body) has established a cooling-off period for an engagement partner of less than five consecutive years, that shorter cooling-off period may be applied, subject to a floor of three years, provided that the applicable time-on period does not exceed seven years.

The back of the 2023 Handbook contains the IESBA-approved revisions to the Code, which are not yet effective. These revisions will become effective in December 2024 and include:

• Revisions to the definition of a public interest entity (PIE).
• Changes to the definitions of “audit client” and “group audit client” in the Glossary arising from the approved revisions to the definitions of listed entity and PIE.
• The technology-related revisions.

Click here to learn more about the IESBA Code.

Reproducing and Translating the IESBA Handbook
To help adoption and implementation of the IESBA standards, stakeholders are invited to submit requests for permission to reproduce or translate the IESBA Handbook online via the Online Permissions Requests or Inquiries system on the IFAC website.

The International Ethics Standards Board for Accountants (IESBA) is an independent global standard-setting board. The IESBA’s mission is to serve the public interest by setting high-quality, international ethics (including independence) standards as a cornerstone to ethical behavior in business and organizations, and to public trust in financial and non-financial information that is fundamental to the proper functioning and sustainability of organizations, financial markets and economies worldwide.

Along with the International Auditing and Assurance Standards Board, the IESBA is part of the International Foundation for Ethics and Audit. The Public Interest Oversight Board (PIOB) oversees IESBA and IAASB activities and the public interest responsiveness of the standards. 

In September 2023, the United Nations will mark the half-way point to the deadline set for achieving the 2030 Agenda and the Sustainable Development Goals. This is an important juncture for global leaders to reflect on the progress we have made, the progress we have not made, and the challenges we face ahead.

Reflecting on the G20’s current theme of One Earth, One Family, One Future, IFAC, acting in its role as the global voice of the accountancy profession, highlights the importance of inclusivity in underpinning sustainable development in its 2023 Call to Action. We must approach sustainability, the public sector, small- and medium-sized entities (SMEs), and education with an inclusive approach to make sure that the opportunities of today and tomorrow are shared, and that economic and social development are truly sustainable.

“We have serious challenges ahead of us. Fortunately, the global accountancy profession is a committed partner, doing our part to drive sustainable development and demonstrating leadership as a truly global and inclusive profession,” said IFAC CEO Kevin Dancey.

IFAC calls on G20 leaders to:

1. Make Sustainability A Reality, Not Just a Goal

• Lead on achieving the UN SDGs and provide a foundation for net zero transitions
• Support the ISSB's global baseline for sustainability disclosures
• Support mandatory assurance of sustainability information pursuant to ISSA 5000
• Support the work of the International Public Sector Accounting Standards Board to develop sustainability reporting standards for the public sector

2. Support Public Financial Management and Fight Corruption

• Support high-quality public financial management, professionalization in the public sector, and accrual accounting at all levels of government
• Continue to prioritize full adoption and implementation of global commitments on the fight against corruption, such as the G20 Anti-Corruption Action Plan

3. Create an Environment for SME Growth and Innovation

• Embed the unique needs of SMEs into global policy making
• Support access to digital infrastructure and skills for SMEs
• Provide a supportive regulatory environment for SMEs

4. No Inclusive Growth without Education

• Support equal access to education, including STEM (science, technology, engineering and math) and accounting skills
• Support financial literacy globally and locally

About IFAC
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 of 180 members and associates in more than 135 jurisdictions, representing millions of professional accountants in public practice, education, government service, industry, and commerce.

The International Ethics Standards Board for Accountants (IESBA) today released its 2022 Annual Report, Reinforcing Ethics and the Public Interest in a Rapidly Evolving World.

The digitally interactive report looks back at 2022 through the eyes of the international ethics standard-setting board, complete with detailed reports on the Board’s projects alongside reflective remarks from its leaders. The report showcases a board in transition, completing long-running projects aimed at further strengthening the IESBA’s International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code), addressing the ethical implications of rapid technological advances, and moving fast to develop the necessary ethics and independence standards for sustainability reporting and assurance, always working to serve the public interest.

“IESBA’s work in 2022 will ultimately strengthen the public’s trust in the professional accountant, corporate reporting and businesses more generally at a time of rapid change and complexity,” said IESBA Chair Gabriela Figueiredo Dias. “Collectively, we’ve ensured the necessary strategic adjustments to better serve the public interest in a context of complex developments that we face today, like sustainability and technology, through our actions to enhance our global ethics and independence standards, thereby raising the bar for ethical conduct and practice for all professional accountants and other service providers that may want to use our standards.”

Beyond the updates on IESBA projects, the 2022 IESBA Report features an overview of the Board’s extensive stakeholder outreach efforts and information about its efforts to promote global adoption and effective implementation of the Code. The Report also includes a message from the IESBA’s Consultative Advisory Group (CAG) Chair, Mr. Gaylen Hansen.

About IESBA

The International Ethics Standards Board for Accountants serves the public interest by setting high-quality ethics standards, including independence requirements, as a cornerstone to ethical behavior in business and organizations, and to public trust in financial and non-financial information that is fundamental to the proper functioning and sustainability of organizations, financial markets and economies worldwide.

Along with the International Auditing and Assurance Standards Board (IAASB), the IESBA is part of the International Foundation for Ethics and Audit (IFEA). The Public Interest Oversight Board (PIOB) oversees IESBA and IAASB activities and the public interest responsiveness of the standards. For copyright, trademark, and permissions information, please visit Permissions.

The International Auditing and Assurance Standards Board (IAASB) today issued its proposed International Standard on Sustainability Assurance (ISSA) 5000, General Requirements for Sustainability Assurance Engagements. With its focus on assurance on sustainability reporting, ISSA 5000, when approved, will be the most comprehensive sustainability assurance standard available to all assurance practitioners across the globe.

“Our proposed ISSA 5000 is a crucial step in enhancing confidence and trust in sustainability reporting. This proposal directly responds to the International Organization of Securities Commissions recommendations and complements the work of other standard setters, including the International Ethics Standards Board for Accountants,” noted IAASB Chair Tom Seidenstein. “Corporate reporting, whether financial or sustainability focused, is more trusted when it receives external and independent assurance based upon globally accepted standards independently developed in the public interest.”

ISSA 5000 is a principles-based, overarching standard suitable for both limited and reasonable assurance engagements on sustainability information reported across any sustainability topic. The IAASB drafted the standard to work with sustainability information prepared under any suitable reporting framework. These frameworks include the many reporting frameworks already in place and those under development, including but not limited to those issued by the European Union, the International Sustainability Standards Board, the Global Reporting Initiative, the International Organization for Standardization, and others. The standard is profession agnostic, supporting its use by both professional accountant and non-accountant assurance practitioners when performing high quality sustainability assurance engagements.

The IAASB is committed to an extensive, high-level outreach plan to ensure broad stakeholder input. One core element of the outreach is a series of four roundtables beginning in September. The IAASB will also take part in virtual, regional, and national events, many held in partnership with other organizations, throughout the consultation period.

“Receiving the broadest range of views from our stakeholders will improve both the quality of and trust in the final standard. Our unprecedented commitment to outreach will allow us to engage directly with a much wider group of stakeholders to gather the valuable insights we need to finalize a high-quality robust standard,” noted IAASB Vice-Chair and Sustainability Task Force Chair Josephine Jackson.

For additional information on upcoming events, follow the IAASB on LinkedIn and/or Twitter and register/subscribe to our mailing list.

ISSA 5000 will be available French, Japanese, Portuguese, and Spanish in the coming weeks. The IAASB invites all stakeholders to comment on the proposed revisions via the IAASB website by December 1, 2023.

The International Federation of Accountants (IFAC) plays a vital role in driving the development, adoption, and implementation of transparent and high-quality international standards. These standards for audit and assurance, ethics and independence, education, and public sector accounting are used by professional accountants and serve as a fundamental pillar within the global financial architecture.

The World Bank, an institution dedicated to providing financing, policy advice, and technical assistance to governments of developing countries, recently extended significant financial support to expand the accessibility of certain materials (noted below) into Spanish and French. This support broadens the availability of these publications to IFAC’s global audience and their stakeholders, and helps to promote greater economic growth, development, and accountability.

In jurisdictions where English is not an official or business language, one of the primary obstacles to successful adoption and implementation of international standards is the lack of access to translations in local languages. IFAC takes proactive steps to tackle this challenge by collaborating with member organizations in leveraging their technical expertise to provide translation support, as well as engaging with donors to help further facilitate the translation process.

IFAC CEO Kevin Dancey said, “IFAC thanks the World Bank and our member organizations for their generous financial support in expanding the accessibility of multilingual materials. Your invaluable contribution has made a profound impact on our efforts to foster the adoption and implementation of international standards on a global scale. Consequently, this will pave the way for driving progress, bolstering economic stability, and ensuring responsible financial practices worldwide.”

For more details on how to support translations, please reach out to Michelle Brody (MichelleBrody@ifac.org) or permissions@ifac.org.

View the newly translated publications in Spanish and French:

      ¹Spanish was not completed under the World Bank.

About IFAC
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 of 180 members and associates in more than 135 jurisdictions, representing more than 3 million accountants in public practice, education, government service, industry, and commerce.

Rapid advances in technology are transforming the way professional accountants conduct their work. To assist them in ethically navigating the challenges and opportunities brought by these advances, the Staff of the Australian Accounting Professional & Ethical Standards Board (APESB) and the Staff of the International Ethics Standards Board for Accountants (IESBA) today jointly released Applying the Code's Conceptual Framework to Independence: Practical Guidance for Auditors In Technology-related Scenarios. The publication describes key technology-related provisions of the International Code of Ethics for Professional Accountants (including International Independence Standards) and provides auditors with three practical examples involving technology-related non-assurance services to illustrate how to apply the Code's requirements with respect to independence.

“This joint APESB-IESBA Staff publication is timely and fulfills a commitment we have made to collaborate with national standard setters and others to provide helpful guidance to assist auditors in implementing and consistently applying the Code’s revised technology-related provisions,” said Gabriela Figueiredo Dias, IESBA Chair. “Over the past three years, the Board has dedicated strategic focus and significant resources to addressing the ethics and independence implications of technological innovation such as AI, blockchain, and data analytics, culminating in strengthened technology-related provisions in the Code and two comprehensive reports under Phases 1 and 2 of its fact-finding work.”

This non-authoritative publication was developed jointly by the Staff of the APESB and IESBA under the auspices of the IESBA’s Technology Task Force, initiated as part of the IESBA’s Phase 2 Technology Working Group activities.  Learn more about IESBA’s technology work here.

About the IESBA

The International Ethics Standards Board for Accountants serves the public interest by setting ethics standards, including independence requirements, as a cornerstone to ethical behavior in business and organizations, and to public trust in financial and non-financial information. Along with the International Auditing and Assurance Standards Board, the IESBA is part of the International Foundation for Ethics and Audit. The Public Interest Oversight Board (PIOB) oversees IESBA and IAASB activities and the public interest responsiveness of the standards. For copyright, trademark, and permissions information, please visit Permissions.

Recent events in a number of major jurisdictions involving professional accountants have raised concerns with many stakeholders and the public about whether the accountants’ conduct was straightforward and honest, free from conflicts of interest, in accordance with confidentiality requirements, or in the public interest. A number of these events have resulted in government inquiries, significant regulatory penalties or other adverse consequences for the professional accountants or their firms, and undermined public trust in the accountancy profession.

Among all professions, the global accountancy profession stands apart in having a comprehensive and robust code of ethics in the International Ethics Standards Board for Accountants’ (IESBA) International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code) that it must apply. The Code is developed in accordance with a rigorous due process and under the oversight of the Public Interest Oversight Board (PIOB). The strength and global acceptance of the Code are evidenced by its adoption or use in over 130 jurisdictions, and adoption by the 34 largest international networks of accounting firms for transnational audits.

“Ethics is fundamental to public trust in the work of all professional accountants and it must always be at the heart of their judgments, decisions, and actions when performing professional activities or services,” said Gabriela Figueiredo Dias, IESBA Chair. “The high-quality ethics standards in the Code are a cornerstone to ethical behavior in business and organizations, and they underpin the accountancy profession’s longstanding good reputation. It is therefore crucial that all accountants fully understand and comply with all their ethical obligations under the Code.”

Professional accountants must act in all business and professional dealings or relationships in accordance with the five fundamental principles of the Code:

• Integrity by being straightforward and honest;
• Objectivity by not being compromised by bias, conflict of interest, or undue influence of, or undue reliance on, individuals, organizations, technology or other factors;
• Professional competence and due care by maintaining professional knowledge and skill at the level necessary to competently perform their work, and acting diligently;
• Confidentiality by respecting the confidentiality of information acquired as a result of professional and business relationships; and
• Professional behavior by complying with relevant laws and regulations, behaving in a manner consistent with the profession’s responsibility to act in the public interest, and avoiding any conduct that might discredit the profession.

The fundamental principles clearly establish the standard of behavior expected of all professional accountants. The Code also contains detailed provisions specifying the conduct and mindset expected of all professional accountants, including demonstrating an inquiring mind and having the strength of character to act appropriately, even when facing pressure or potential adverse personal or organizational consequences.

Importantly, the Code sets a clear expectation for professional accountants, especially those in leadership or managerial roles, to promote an ethical culture within their organizations.

Upholding the fundamental principles and complying with the specific requirements of the Code enable professional accountants to meet their responsibility to act in the public interest. These obligations are in no way lightened or diminished by the types of activities or services they undertake. The Code applies to professional accountants in all their professional activities, whether it is audit, tax, consulting or other advisory services, or in business. Non-compliance with ethical requirements not only creates a risk of adverse consequences for accountants from a professional or regulatory standpoint, but also may result in profound negative consequences for firms, employing organizations, clients, other stakeholders, and the public at large. Ethical failures can also damage the profession’s reputation.

Ethics is central to the proper functioning of organizations, financial markets, and economies worldwide. The fundamental principles are the foundation to ethical behavior within organizations and underpin the integrity and credibility of financial and non-financial information. An organizational culture that integrates an ethical approach strengthens public trust in professional accountants’ work, safeguards the well-being and sustainability of organizations, and ultimately serves to protect the public interest.

As the global voice of the accountancy profession, the International Federation of Accountants (IFAC) supports corporate reporting that better addresses a company’s ability to create long-term value and is decision useful for investors and other stakeholders. Specific regulatory requirements are necessary to harmonize reporting practice and deliver consistent, comparable, assurable, and decision useful sustainability information.

To this end, IFAC has submitted feedback in response to the European Commission’s European Sustainability Reporting Standards (ESRS). In its response, IFAC welcomes the standards while noting significant concerns regarding the need for interoperability that supports a global system for reporting. In addition to the ESRS, IFAC has also welcomed the International Sustainability Standards Board’s (ISSB) new standards and other important jurisdiction or regional initiatives, notably the U.S. SEC’s proposed climate disclosure rule. However, these approaches must align key concepts, terminologies, and metrics to avoid regulatory fragmentation, especially on matters of materiality.

“We strongly support efforts by the European Commission and ISSB to find areas of interoperability in their standards, starting with climate. However, substantive differences remain, so collaboration must continue. This is crucial for investors and all stakeholders who want interoperable ESRS and ISSB standards and connectivity between sustainability and financial information,” said IFAC CEO Kevin Dancey. “ISSB standards should function as a global baseline for all jurisdictions, including the EU for financial materiality, to adopt or align with. This is also why we need transparency—a navigation tool to help stakeholders know where the areas of alignment exist.”

Implementation by companies and enforcement by regulators of the new standards are essential to ESRS success. IFAC urges additional transitional reliefs to allow companies sufficient time to implement governance, processes, reporting capacity, and internal controls—all essential for high quality disclosure and its assurance.

As assurance brings trust and confidence to corporate reporting, IFAC encourages the European Commission to participate in ongoing stakeholder engagement with the International Auditing and Assurance Standards Board (IAASB) toward the goal of requiring use of the IAASB’s forthcoming new International Standard on Sustainability Assurance (ISSA) 5000 under the Corporate Sustainability Reporting Directive. The International Ethics Standards Board for Accountants’ (IESBA) work on establishing ethics and independence requirements for sustainability assurance practitioners is also vital to producing high-quality, reliable information.

About IFAC
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 of 180 members and associates in more than 135 jurisdictions, representing more than 3 million accountants in public practice, education, government service, industry, and commerce.

The International Ethics Standards Board for Accountants (IESBA) congratulates the Italian Ministry of Economy and Finance on the announcement today of the launch of a new Code of Ethics and Independence for Auditors in Italy. This new Italian Code of Ethics (Codice italiano di etica e indipendenza dei revisori legali dei conti), which is based off IESBA’s International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code) with specific adaptations and localizations for compatibility and operability with the Italian and European regulatory frameworks, replaces the country’s previous code of ethics, adopted in 2018.

“On behalf of IESBA, I applaud the Italian Ministry of Economy and Finance for this important commitment to ethics and independence, and to the public interest,” said Gabriela Figueiredo Dias, IESBA Chair, who was invited to speak at the announcement event in Rome today. “This code will provide statutory auditors with a stronger ethics and independence framework, significantly elevating the ethical bar for an important group of professionals who are formally provided with public faith in reviewing financial statements and whose work is, therefore, critical to create trust in corporate information and to support sound business relations and a well-functioning economic system.”

The IESBA Code places a responsibility on all professional accountants to act in the public interest. The strength and global acceptance of the Code are evident as it has been adopted or is used in over 130 jurisdictions, translated into about 40 languages, and adopted by the 34 largest international networks of accounting firms for transnational audits.

About the IESBA

The International Ethics Standards Board for Accountants serves the public interest by setting ethics standards, including independence requirements, as a cornerstone to ethical behavior in business and organizations, and to public trust in financial and non-financial information. Along with the International Auditing and Assurance Standards Board, the IESBA is part of the International Foundation for Ethics and Audit. The Public Interest Oversight Board (PIOB) oversees IESBA and IAASB activities and the public interest responsiveness of the standards. For copyright, trademark, and permissions information, please visit Permissions.