The Staff of the International Ethics Standards Board for Accountants (IESBA) today released a questions and answers (Q&A) publication on the pronouncement Revisions to the Code Relating to the Definition of Engagement Team and Group Audits. The revisions to the Code address holistically the various independence considerations in an audit of group financial statements. The revisions also deal with the independence and other implications of the changes to the definition of an engagement team in the International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code) to align with changes to the definition of the same term in the International Auditing and Assurance Standards Board’s (IAASB) International Standards on Auditing (ISAs) and International Standards on Quality Management (ISQMs).
The Q&A publication is designed to highlight, illustrate, or explain aspects of the revisions in the Code and is intended to complement the Basis for Conclusions for the final pronouncement. It will assist firms, national standards setters, and professional accountancy organizations in adopting and/or implementing the revisions. The Q&As will also assist regulators and audit oversight bodies, the corporate governance community, investors, preparers, educational bodies or institutions, and other stakeholders in understanding the revisions to the Code.
The development of the Q&As has been informed by the IESBA’s extensive discussions and consultations with a wide range of stakeholders and the IESBA’s own deliberations during the development and finalization of the pronouncement.
The pronouncement is coming into effect for audits of financial statements and group financial statements for periods beginning on or after December 15, 2023, with early adoption permitted.