Proposed Revisions to the Definitions of Listed Entity and Public Interest Entity in the Code

IESBA
| Exposure Drafts and Consultation Papers
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This exposure draft proposes revisions to the International Code of Ethics for Professional Accountants (including International Independence Standards) that broadens the definition of a public interest entity (PIE). These revisions include more categories of entities, given the level of public interest in their financial condition, for the purposes of additional independence requirements to enhance confidence in their audits.

Among other matters, the proposed revisions:

  • Introduce an overarching objective for additional requirements to enhance confidence in the audit of financial statements of PIEs.
  • Provide guidance on factors to consider when determining the level of public interest in an entity.
  • Broaden the definition of PIE to additional categories of entities.
  • Replace the term “listed entity” with the term “publicly traded entity” and redefine that PIE category.
  • Introduce new requirements for firms to determine if additional entities should be treated as PIEs for independence purposes and to publicly disclose if an audit client was treated as a PIE.
  • Recognize and encourage local regulators to refine PIE categories in regard to national conditions.

Comments requested by May 3, 2021.

The IESBA released a staff publication which provides additional context to the proposed revisions to the definition of a PIE. This staff publication supplements the guidance material in the explanatory memorandum of the Exposure Draft and is intended to assist local regulators, national standard setters, or other relevant local bodies in considering and planning adoption of the revised PIE definition when finalized and issued by the IESBA.
Download (643.86 KB)
Supplementary Guidance to Exposure Draft to Aid Local Body Considerations Regarding Adoption and Implementation
Download (6.31 MB)
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Submitted Comment Letters

  1.  (Colombia)
  2.  (Hong Kong, Special Administrative Region of China)
  3.  (Malaysia)
  4.  (New Zealand)
  5.  (Canada)
  6.  (United States of America)
  7.  (Ireland)
  8.  (Ghana)
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  11.  (United Kingdom)
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  18.  (Korea)
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  20.  (Canada)
  21.  (United States of America)
  22.  (South Africa)
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  25.  (Australia)
  26.  (Thailand)
  27.  (Norway)
  28.  (Belgium)
  29.  (Germany)
  30.  (Italy)
  31.  (France)
  32.  (United Kingdom)
  33.  (United Kingdom)
  34.  (Canada)
  35.  (United States of America)
  36.  (Brazil)
  37.  (Tanzania, United Republic of)
  38.  (Jamaica)
  39. MNP LLP (MNP) (276.27 KB)
     (Canada)
  40.  (United States of America)
  41.  (Cayman Islands)
  42.  (United States of America)
  43.  (Colombia)
  44.  (Botswana)
  45.  (Belgium)
  46.  (Türkiye)
  47. CFO Forum (826.11 KB)
     (South Africa)
  48.  (Australia)
  49.  (South Africa)
  50.  (United Kingdom)