- New staff publication explains how proportionality is built into the IESBA Code.
- Designed to support small and medium practices in applying the Code with confidence.
- Presented at the EFAA Annual Conference in Dublin as part of IESBA’s SMP engagement.
The International Ethics Standards Board for Accountants (IESBA) has released a guide to its approach to proportionality in the ethics and independence standards in the IESBA Code. The publication entitled “Proportionality of the IESBA Code” aims to support all professional accountants, and especially small and medium practices (SMPs), in understanding how the Code maintains a universal high ethical bar while employing proportionality mechanisms embedded in its design.
The publication is meant to underscore that while ethics is not proportionate, the Code is. Every professional accountant is required to uphold the same five fundamental principles: integrity, objectivity, professional competence and due care, confidentiality, and professional behavior. The Code, however, adopts a proportionate approach to how professional accountants meet these principles in practice. The same proportionate approach is applied to independence for professional accountants and firms in an audit or assurance context.
Proportionality is a defining feature of the Code's design, embedded through its principles-based approach, its building-blocks architecture, and its scalable conceptual framework.
The publication explains how these proportionality mechanisms work in practice across three key dimensions:
- The Code’s conceptual framework, which requires professional accountants to identify, evaluate, and address threats to the fundamental principles and, where applicable, to independence, is inherently scalable. It does not prescribe a uniform approach to identifying and evaluating threats; it requires careful consideration of the relevant facts and circumstances, including interests and relationships;
- The Code’s building-blocks architecture, which means that practitioners apply only the parts of the Code relevant to their role and the professional activities or services they perform, avoiding unnecessary burden while preserving rigor;
- Clearly differentiated provisions, especially regarding the Code’s independence standards, which are calibrated to the level of public interest at stake, with more stringent requirements applying only where the level of public interest in the engagement and the public reliance on the information are highest.
“The question we hear most often from SMPs is not whether they support ethics, but whether the Code was built with them in mind. The answer is yes – and this publication makes that visible,” said Gabriela Figueiredo Dias, IESBA Chair. “Proportionality is not a shortcut. The Code sets a universal ethical standard and trusts professional accountants to lean on its proportionality mechanisms with judgment in applying it in their context.”
Supporting Small and Medium Practices
The guide was presented for the first time at the European Federation of Accountants and Auditors for SMEs (EFAA) Annual Conference in Dublin, where IESBA Chair Gabriela Figueiredo Dias delivered the opening keynote of a panel dedicated to ethics and proportionality in the IESBA Code. EFAA represents over 400,000 accountants, auditors, and tax advisors across 15 European countries, the vast majority of them in SMPs.
SMPs constitute the dominant part of the global accountancy profession. According to the latest IFAC Global SMP Survey, 64% of SMP practitioners worldwide are sole practitioners or in practices of two to five partners and staff. They are the primary professional service providers to small and medium enterprises (SMEs), which represent 99.8% of all enterprises in the European Union and more than 65% of jobs in the non-financial business sector. At the same time, SMPs operate under significant commercial and regulatory pressure, often without the dedicated compliance infrastructure available to larger firms. The publication is designed to support SMP practitioners in navigating the Code with clarity and confidence, by making visible the proportionality mechanisms that have always been part of its design.
With the release of the guide, the IESBA reaffirms its broader commitment to supporting the adoption and implementation of the Code, including through its June 2025 decision to focus on practical support for practitioners and not issue any significant new standards before 2027.
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 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 (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.
Contact Information:
Rui Peres Jorge
Director, Strategy and Communications
International Ethics Standards Board for Accountants (IESBA)
ruiperesjorge@ethicsboard.org | Direct: +351 966-301-383
Zsolt Bobis
Lead, Communications
International Ethics Standards Board for Accountants (IESBA)
zsoltbobis@ethicsboard.org