The International Ethics Standards Board for Accountants (IESBA) today released for public comment proposed revisions to the International Code of Ethics for Professional Accountants (including International Independence Standards).

The Exposure Draft Proposed Technology-related Revisions to the Code seeks to enhance the Code’s robustness and expand its relevance in an environment being reshaped by rapid technological advancements. The proposed amendments will guide the ethical mindset and behavior of professional accountants in business and in public practice as they deal with changes brought by technology in their work processes and the content of the services they provide. 

“Technological innovation is transforming the world of business and professional services in ways we would never have imagined even a decade ago,” said IESBA Chair Ms. Gabriela Figueiredo Dias. “Technology is not neutral, and professional accountants’ working relationship with it must be shaped by ethics. These timely proposals are designed to emphasize and strengthen the ethical principles that should guide them as they navigate the challenges and take advantage of the opportunities created by these developments, recognizing ultimately their responsibility to act in the public interest.”

Among other matters, the proposals:

• Draw special attention to the professional competence and confidentiality imperatives of the digital age. 
• Address the ethical dimension of professional accountants’ reliance on, or use of, the output of technology in carrying out their work. 
• Further enhance considerations relating to threats from the use of technology as well as considerations relating to complex circumstances in applying the Code’s conceptual framework. 
• Strengthen and clarify the International Independence Standards (IIS) with respect to technology-related non-assurance services (NAS) firms may provide to their audit clients or technology-related business relationships they may enter into with their audit clients.
• Explicitly acknowledge that the IIS that apply to assurance engagements are applicable to assurance engagements on non-financial information, for example, environmental, social, and governance (ESG) disclosures.

The development of the proposals has been informed by extensive fact-finding work and outreach to stakeholders.

The proposed revisions build on the role and mindset changes that became effective last December, and the revised NAS provisions that will become effective in December 2022.

How to Comment

The IESBA invites all stakeholders to comment on the Exposure Draft by visiting the IESBA website. Comments are requested by June 20, 2022.

The International Federation of Accountants (IFAC), which comprises 180 member and associate organizations and represents over 3 million professional accountants globally, welcomes the opportunity to provide input into the European Commission’s work to enhance corporate reporting—including a focus on corporate governance, statutory audit, and supervisory aspects of the ecosystem that delivers relevant, reliable, and comparable information to stakeholders.

As the voice of the global accountancy profession, IFAC understands the crucial role that auditors, as well as professional accountants more broadly, play in high-quality corporate reporting.  But no matter how skilled or well-resourced, auditors alone cannot overcome significant shortcomings in other key areas of the reporting ecosystem—especially the role of directors, audit committees, and those charged with governance.

IFAC believes that global standards promote global methodologies, which lead to enhanced and more consistent quality in both reporting and assurance.  We support high-quality, globally-applicable standards for financial reporting developed by the IASB, sustainability disclosure developed by the ISSB, audit and assurance developed by the IAASB, as well as the IESBA International Code of Ethics.  We also believe audit firms are best placed to provide not only audits of financial statements but also assurance on sustainability disclosures.

IFAC CEO Kevin Dancey said, “Corporate governance, audit, and supervision have historically focused on financial statement reporting for investors and other providers of capital.  But now that sustainability-related disclosure is becoming mainstream, this information must also be high-quality and trustworthy.  The accountancy profession, with its responsibility to act in the public interest, has an essential role to play in this evolution of corporate reporting.”

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 135 countries and jurisdictions, representing more than 3 million accountants in public practice, education, government service, industry, and commerce.

The Fast Future With IFAC is a conversational podcast series that features innovative SMPs sharing how they’re adapting to the rapidly changing global economy.

Episode one features an interview with Amela Kmetas, a member of the Chartered Accountants of Australia and New Zealand (CAANZ). Her small firm in Melbourne, Australia specializes in taxation advice, management accounting, budgeting, and bookkeeping.

Our host, IFAC principal Kristy Illuzzi, spoke with Amela about many pressing issues facing the SMPs, including:

• The impact of technological advances on the firm’s business model
• The firm’s experience with cybersecurity
• Covid-19’s effect on the firm, its clients, and its employees
• Advisory services
• Recruiting and hiring

Visit IFAC's iTunes podcast channel or click below to listen to this episode of The Fast Future With IFAC.

Stay tuned for our next conversation with an innovative practitioner, coming in March.

(Back to the Fast Future With IFAC homepage.)

The Staff of the International Ethics Standards Board for Accountants (IESBA) today released a set of frequently asked questions (FAQs) on the recently revised fee-related provisions of The International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code)*. The FAQs have been informed by the extensive discussions and consultations with a wide range of stakeholder groups and the IESBA’s own deliberations during the development and finalization of the standard.

The publication is designed to highlight, illustrate or explain aspects of the revised fee-related provisions in the Code and thereby assist in their proper application. It is intended to complement the Basis for Conclusions for the final standard and assist national standards setters, professional accountancy organizations, and professional accountants in public practice (including firms) as they adopt and/or implement the revised provisions. The publication is also intended to assist regulators and audit oversight bodies, the corporate governance community, investors, preparers, educational bodies or institutions, and other stakeholders in understanding the revised standard and its application.

*The revised standard addresses a number of topics, including threats to independence created by fees paid by an audit client (including fees for services other than audit), fee dependency, and transparency of fee-related information to those charged with governance and to the public from an auditor independence perspective in the case of public interest entities. The revised standard becomes effective for audits of financial statements for periods beginning on or after December 15, 2022. Read the provisions here.

The International Ethics Standards Board for Accountants (IESBA) today released the 2021 Edition of the Handbook of the International Code of Ethics for Professional Accountants (including International Independence Standards). The new edition contains recently approved revisions to the Code, including:

• The revisions to Part 4B to align terms and concepts used in the Code to those in the International Auditing and Assurance Standards Board’s (IAASB) International Standard on Assurance Engagements (ISAE) 3000 (Revised). Those revisions became effective in June 2021.
• The revisions to Parts 1 and 2 to promote the role and mindset expected of professional accountants. Those revisions will become effective in December 2021. Early adoption is encouraged.

Approved revisions which are not yet effective have been included in the back of the Handbook. These revisions will become effective in December 2022 and include:

• Revisions to the Code addressing the objectivity of an engagement quality reviewer and other appropriate reviewers.
• Revisions to the non-assurance services provisions of the Code.
• Revisions to the fee-related provisions of the Code.

Click here to access the 2021 edition of the IESBA Handbook.

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.

About IESBA
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 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 Code).

Ms. Gabriela Figueiredo Dias will become the first Chairwoman of the IESBA from January 1, 2022. Ms. Figueiredo Dias will succeed Dr. Stavros Thomadakis, who has led the IESBA since 2015.

Ms. Figueiredo Dias has extensive experience in international standard setting, legal and regulatory structure and governance, and academia. She currently serves as the President of the CMVM (Portuguese Securities Market Commission), the authority responsible for regulating and supervising the markets of financial instruments, covering listed companies, asset managers, auditors and investment firms. There, she provides strategic direction to the Board, manages the organization and represents it before International Organizations such as IOSCO and OECD, the European Commission and the European Securities and Markets Authority (ESMA), as well as the Portuguese Government, the National Council of Financial Supervisors and market stakeholders. She has also served as head of the international and regulatory policy department and of the issuers and financial information department at CMVM and has extensive experience in and understanding of financial regulatory frameworks. In addition, she has served as a member of the ESMA Board and Management Board, member of the IOSCO Board, Vice-Chair of the OECD Corporate Governance Committee, Chair of the ESMA Investment Management Standing Committee, and she will remain in office as non-executive President of the General Board of the University of Coimbra in Portugal. She holds a master’s degree in law from the Coimbra University Law School.

“I am honored to be selected as the next IESBA Chair during this critical time of transition for the Board and the profession,” said Ms. Figueiredo Dias. “As President of the Portuguese Securities Commission, I have advocated for strong international standards, based on robust ethical principles and developed with the public interest in mind. The IESBA’s work in setting high-quality, internationally appropriate ethics standards for auditors, including in respect to their independence, and other professional accountants in business, the public sector and public practice is critical to the integrity and robustness of the global financial system and architecture, and I look forward to leading the IESBA in playing an impactful role toward a more sustainable global economy and society.”

“Having experienced firsthand the demands of this role, I am confident Gabriela’s knowledge of the field and unwavering commitment to enhancing ethics on behalf of the public interest will be invaluable assets to the IESBA,” said Stavros Thomadakis, IESBA Chairman. “I look forward to Gabriela’s service to the IESBA and believe she will be a strong and assiduous proponent of the Board’s collective vision.”

Ms. Figueiredo Dias’ appointment was recommended by the Interim Nominating Committee after an independent and extensive global search. Her appointment was endorsed by the IFAC Board and approved by the Public Interest Oversight Board, which oversees the IESBA.

"I’m pleased to convey that the Interim Nominating Committee recommended Ms. Figueiredo Dias via a very competitive process," said Makoto Sonoda, Interim Nominating Committee Chair. "The Committee has full confidence in Ms. Figueiredo Dias who will bring her extraordinary experience, a clear vision, and a vast network to the IESBA, all of which will contribute to the Board’s public interest mandate and mission of strengthening ethics standards globally.”

About the IESBA

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 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 Code).

About the Interim Nominating Committee

Chaired by Mr. Makoto Sonoda, Chair of the Committee on Issuer Accounting, Audit and Disclosure (Committee 1) of the International Organization of Securities Commissions (IOSCO) and Director for International Accounting and Director for International Capital Market Regulation of the Financial Services Agency (FSA), the Interim Nominating Committee was formed by the Monitoring Group to conduct an independent global search for the new IESBA Chair.

Tax incentives should be used to enable positive global outcomes, such as economic recovery from the pandemic and averting climate crisis, according to a new joint report released today by the Association of Chartered Certified Accountants (ACCA), Chartered Accountants Australia and New Zealand (CA ANZ), and the International Federation of Accountants (IFAC).

A survey of 8,000 people across the G20 countries and New Zealand concluded that two-thirds (66%) were strongly in favor of using the tax systems to help individuals and small businesses to recover following the effects of Covid-19.

The full report Public trust in tax: surveying public trust in G20 tax systems can be read here.

Respondents were also very much in favor of similar tax breaks to support efforts to tackle “global megatrends”, such as the fight against climate crisis, and efforts to support retirement savings, with 66% believing these would be appropriate incentives.

Perhaps surprisingly, the survey discovered that support had fallen in 15 of the 20 countries for international collaboration on tax.

This is despite the fact that 2021 has seen historic advances in international tax cooperation, including agreement by G7 countries to enforce a minimum rate of 15% corporation tax.

The Public Trust in Tax study, which was carried out in the first quarter of 2021, follows two previous reports on the subject in 2017 and 2019.

Other key findings included insight on whether taxpayers in different countries felt they were paying a “reasonable amount of tax”. Overall, most respondents were likely to agree that their tax rates were reasonable across all pay grades.

However, fewer than one in four respondents across the G20 countries stated that high income individuals paid a reasonable amount of tax in their country.

And while 33% believed that local companies were likely to be paying a reasonable amount of tax, in seven countries multinational corporations were thought to be paying too little tax.

Despite this suspicion, 49% of people overall were in favor of using tax incentives to attract multinational business. There was also a fall from 44% to 39% in the number supporting requirements to make multinational companies publish detailed tax information, although the vast majority still support MNCs sharing all their information with local tax authorities.

The survey also uncovered varying levels of trust in global tax authorities and the players in the tax system. Trust in government tax authorities is polarized, with 43% saying they have trust or a high level of trust in the tax authorities, but 22% saying they distrust them. Overall, trust in government tax bodies has slightly increased.

Professional tax accountants (55%) have the highest level of trust, followed by professional tax lawyers (50%). Despite a small increase in the level of trust this time, politicians remain the least trusted group, at just 22% net distrust.

Accountants are also seen to contribute to the efficiency of the tax systems by making them more efficient, effective and fair.

The survey also asked questions about the trust people in various countries placed in their media and social media on the issue of tax. Social media was the least trusted source, distrusted by more than 40% and traditional media fared little better, scoring over 30% for distrust.

Total trust in social media was highest in India and China, but lowest in New Zealand and France. These results were mirrored for traditional media, with India and China placing the most faith in their tax coverage and France registering the most distrust. Russian media was also distrusted by 54%.

“The relationship between taxpayers and governments, and between businesses, society and tax systems, will be fundamental to the shape of the economies that support us all, over the coming years,” said report author Jason Piper, head of taxation for ACCA. “Public trust is central to tax morale, which is the tendency for individuals and businesses to pay their tax voluntarily and without intervention by tax authorities.”

Anecdotally, many respondents stressed the importance of financial education from an early age, so that people understand the purpose of tax.

“Alongside the uncertainty of the pandemic, this year has also seen historic advances in international tax cooperation, with political agreements at the G7, G20 and OECD Inclusive Framework that began not long before this series of reports,” said Ainslie van Onselen, chief executive of CA ANZ. “Tax policies to help address challenges such as climate change and ageing populations are no longer issues on the horizon, it’s here and now. Well-functioning tax systems and high levels of taxpayer trust backed by a robust accounting profession to design, implement and navigate the tax implications are vital as we look to shape a better future.”

The correlations between social well-being and an effective tax system and economic growth are clear. No matter the cultural differences or divergent views on who is paying enough taxes or how the funds raised should be spent.

“As leaders in the global accountancy profession, we are proud to see the high levels of trust in professional accountants,” said Kevin Dancey, chief executive of IFAC. “This embodies the profession that we know. At the same time, we understand that there is always more to do to sustain and strengthen that trust.”

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. Comprised of 180 members and associates in more than 130 countries and jurisdictions, IFAC represents more than 3 million accountants in public practice, education, government service, industry and commerce.

Over four decades, IFAC has represented the global profession and supported the development, adoption, and implementation of international standards that underpin the contributions of today’s global accountancy profession. IFAC has maintained a long-term approach to building and strengthening a global accountancy profession that supports transparent, accountable, and sustainable organizations, financial markets, and economies. More information is here.

Abour ACCA: ACCA is the Association of Chartered Certified Accountants. We’re a thriving global community of 233,000 members and 536,000 future members based in 178 countries and regions that upholds the highest professional and ethical values.

We believe that accountancy is a cornerstone profession of society that supports both public and private sectors. That’s why we’re committed to the development of a strong global accountancy profession and the many benefits that this brings to society and individuals.

Since 1904 being a force for public good has been embedded in our purpose. And because we’re a not-for-profit organization, we build a sustainable global profession by re-investing our surplus to deliver member value and develop the profession for the next generation.

Through our world leading ACCA Qualification, we offer everyone everywhere the opportunity to experience a rewarding career in accountancy, finance and management. And using our respected research, we lead the profession by answering today’s questions and preparing us for tomorrow.

ACCA and CA ANZ have formed a strategic alliance for the benefit of members and to help shape the future of the profession. Find out more about us at accaglobal.com

About CA ANZ:

Chartered Accountants Australia and New Zealand represents more than 128,000 financial professionals, supporting them to make a difference to the businesses, organisations and communities in which they work and live. We promote the CA designation and high ethical standards, deliver world-class services and life-long education to members and advocate for the public good. www.charteredaccountantsanz.com

In The Way Forward roadmap toward a global system for reporting on sustainability-related information, IFAC called on the IFRS Foundation to establish a new International Sustainability Standards Board (ISSB).  Today we reiterate our support. With its independence, good governance, and track record of due process, the IFRS Foundation is uniquely positioned to establish an independent ISSB within existing IFRS governance—comprised of the Monitoring Board, IFRS Foundation Trustees, and IFRS Advisory Council. The proposed multi-stakeholder expert consultative committee will also be crucial to bringing the right stakeholders to the table in support of the standard-setting activities of the new Board.

IFAC’s response strongly supports the four-point strategy put forth in the Trustees’ proposals:

• The ISSB will have an investor focus on enterprise value
• The ISSB will prioritize climate-related reporting first
• The ISSB will build on the work of existing initiatives
• The ISSB will take a Building Blocks Approach

IFAC CEO Kevin Dancey said, “Agility and flexibility in the organizational arrangements supporting the establishment of the new ISSB are needed for the IFRS Foundation to move with speed—making as much progress as possible in the shortest amount of time, while remaining focused on high-quality outcomes. In our analysis, the proposed amendments appropriately incorporate this imperative, which underlies all other criteria for success. As comments from key global stakeholders come in, it is great to see such widespread and broad support for the ISSB initiative.”

Read more about IFAC’s views.

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 135 countries and jurisdictions, representing more than 3 million accountants in public practice, education, government service, industry, and commerce.

IFAC, the International Federation of Accountants, which comprises 180 member and associate organizations and represents over 3 million professional accountants globally, continues its work in support of high-quality audits and effective corporate governance.

In its response to the UK Department for Business, Energy & Industrial Strategy (BEIS) consultation on restoring trust in audit and corporate governance, IFAC emphasized high-level themes that should govern any future reforms, including the importance of a well-functioning ecosystem, a clear focus on audit quality, and an appreciation for the global context.

IFAC’s response draws on its previously published framework for Achieving High-Quality Audits—based on the right process, the right people, the right governance, the right regulation, and the right measurement.

IFAC CEO Kevin Dancy said, “We urge policymakers in the UK and elsewhere to pursue reforms with an unwavering view to enhancing audit quality above all else. As the UK is a leader in audit and corporate governance, any changes enacted there are likely to have an impact beyond its borders. The success of a company, the quality of its reporting, and the quality of its audit all depend on a functioning ecosystem of participants. This is why the holistic approach taken in the Consultation is so important."

See IFAC’s response to the BEIS consultation.

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 135 countries and jurisdictions, representing more than 3 million accountants in public practice, education, government service, industry, and commerce.

The International Federation of Accountants (IFAC), which represents more than 3 million professional accountants globally, wishes to share the Monitoring Group Nominating Committee’s Call for Applications for membership to the Public Interest Oversight Board (PIOB), and broadly encourages qualified individuals to consider applying to this important organization.

The Monitoring Group’s press release announcing the Call may be found here and more information about the Monitoring Group Nominating Committee can be found at their website here.

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 135 countries and jurisdictions, representing more than 3 million accountants in public practice, education, government service, industry, and commerce.