Definitions of Listed Entity and Public Interest Entity
The objectives of the IESBA’s Definitions of Listed Entity and PIE Project are:
(a) To review, in coordination with the IAASB, the definitions of the terms “listed entity” and “PIE” in the Code with a view to revising them as necessary so that they
remain relevant and fit for purpose; and
(b) In doing so, to:
(i) Establish agreement between the IESBA and IAASB on a common revised definition of the term “listed entity” that would be operable for both Boards’
(ii) Develop a pathway that would achieve convergence between the concepts underpinning the definition of a PIE in the Code and the description of an
ESPI in the IAASB standards to the greatest extent possible.
The project is focused on audits of financial statements and auditor independence.
- Michael Ashley, Chair, IESBA Member
- Liesbet Haustermans, IESBA Member
- Ian McPhee, IESBA Member
- Andrew Mintzer, IESBA Member
IESBA September 2020 Meeting Highlights
The IESBA considered issues and comments raised by respondents to Question #4 of the Exposure Draft, Proposed Revisions to the Non-Assurance Services Provisions of the Code (NAS ED), and a first read of the Task Force proposals.
Among other matters, the IESBA considered a revised overarching objective for PIE provisions in the IIS; revisions to the proposed list of high-level categories of PIEs and the Task Force’s reflections on other types of entities that could be included in the list; the merit of a limited rebuttable presumption as a means of reducing the risk of the high-level categories of PIEs being adopted at the local level without appropriate refinement; the issue of transparency disclosure when firms choose to treat an entity as a PIE for independence purposes; and whether the scope of the related entity principle in the Code (paragraph R400.20) should be expanded by reference to whether the audit client is a PIE as opposed to a listed entity. The IESBA also considered the timing of the PIE Exposure Draft and how to coordinate the effective date of the final PIE provisions with the effective date of the revisions to the NAS and Fees provisions.
The IESBA noted feedback on the current thinking on the project from the IAASB’s July 2020 meeting. In addition, the IESBA considered the responses from approximately 40 national and regional professional accountancy bodies to a questionnaire circulated by the Task Force in collaboration with the IFAC Quality and Development Department to assist in determining the capabilities of local bodies to refine the proposed list of PIE categories.
The IESBA will consider revised proposals from the Task Force at its December 2020 meeting with a view to approving an Exposure Draft.