IESBA Proposes Guidance to Address the Objectivity of Engagement Quality Reviewers

The International Ethics Standards Board for Accountants (IESBA) today released for public comment the Exposure Draft, Proposed Revision to the Code Addressing the Objectivity of Engagement Quality Reviewers. The proposed limited-scope revision to the International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code) dovetails with the International Auditing and Assurance Standards Board’s (IAASB’s) development of proposed International Standard on Quality Management (ISQM) 2, Engagement Quality Reviews.

The Exposure Draft includes proposed guidance on the application of the conceptual framework in the Code to address the topic of the objectivity of an engagement quality reviewer (EQR), thereby supporting proposed ISQM 2 in addressing the matter of the eligibility of an individual to serve in an EQR role. In particular, the proposed guidance:

• Explains the different types of threat to compliance with the fundamental principle of objectivity that might be created in circumstances where an individual is being considered for appointment as an EQR for a given engagement;
• Sets out factors to consider in evaluating the level of the identified threats; and
• Suggests actions that might be safeguards to address the threats.

The development of the proposal benefited from cooperation with the IAASB within the established coordination framework of the two Boards. The IESBA is proceeding on an accelerated time frame to finalize the proposal in order to align closely with the anticipated finalization of ISQM 2 within 2020.  

Comments on the Exposure Draft are requested by March 16, 2020 from all stakeholders.

About the IESBA

The International Ethics Standards Board for Accountants (IESBA) is an independent global standard-setting board. The IESBA serves 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 IESBA believes a single set of high-quality ethics standards enhances the quality and consistency of services provided by professional accountants, thus contributing to public trust and confidence in the accountancy profession. The IESBA sets its standards in the public interest with advice from the IESBA Consultative Advisory Group (CAG) and under the oversight of the Public Interest Oversight Board (PIOB).