The International Ethics Standards Board for Accountants (IESBA) today released the Report, Elevating Ethics and Independence Standards for a Complex World, summarizing the Board’s accomplishments for 2020 and 2021.

“This Report includes my final message as IESBA Chairman and showcases the significant progress that the IESBA has made on behalf of the public interest during a time of great uncertainty,” said Dr. Stavros Thomadakis, former Chairman of the IESBA. “This includes the critical work that has been completed to strengthen the International Independence Standards, especially in relation to Non-Assurance Services, Fees, and the definition of a public interest entity; as well as timely and important milestones in projects related to Tax planning, Technology, and Independence in Group Audits. I am also proud of the extensive work that has been done jointly with certain National Standards Setters to highlight the applicability of the International Code of Ethics for Professional Accountants (including International Independence Standards) to the unique challenges posed by the COVID-19 Pandemic.”

The 2020-2021 Report provides an overview of the IESBA’s extensive stakeholder outreach efforts. It also provides information about the Board’s partnership with IFAC to promote awareness, adoption, and effective implementation of the Code.

“As evidenced by this report, the IESBA’s body of work during the years the world was engulfed in a global pandemic is as important as it is impressive,” said IESBA Chair Gabriela Figueiredo Dias. “The IESBA successfully pushed key strategic initiatives further – such as the work to strengthen the International Independence Standards – while skillfully pivoting to address the real-time issues affecting professional accountants brought on by innovations in technology and the COVID-19 pandemic.”

The Report also provides an overview of the IESBA’s Consultative Advisory Group (CAG) and includes a message from the IESBA CAG Chairman, Mr. Gaylen Hansen.

Click here to learn more about IESBA.

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 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 Code).

This IESBA Sustainability and Ethics Discussion examines the critical role that complying with ethics standards, including on independence, plays in ensuring reliable and trustworthy sustainability information. The one-hour, live-streamed conversation between IESBA Chair, Gabriela Figueiredo Dias; IESBA Sustainability Working Group Chair and UK Financial Reporting Council Executive Director, Mark Babington, and Financial Conduct Authority Director of ESG, Sacha Sadan provided key insights about the applicability of the International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code) to the preparation and presentation of sustainability information and the provision of assurance thereon.

Mr. Twagirimana is the Quality and Development Manager at the Institute of Certified Public Accountants of Rwanda (ICPAR). He is responsible for the overall compliance with IFAC Statements of Membership Obligations (SMOs).  He plays a key role in the adoption, implementation and compliance with international standards, including IESBA Code of Ethics for Professional Accountants and, investigation and discipline of members. Prior to joining ICPAR, Mr. Twagirimana worked in audit practice and consultancy with PricewaterhouseCoopers (PwC) and in telecommunication with MTN Rwanda.

Mr. Twagirimana is a Certified Public Accountant and a member of the Institute of Certified Public Accountants of Rwanda. He holds an MBA from Heriot-Watt University. He is also a member of the Technical Committees for the Pan African Federation of Accountants (PAFA) and East African Community Institutes of Accountants (EACIA).

Nominated to represent the East African Region, Mr Twagirimana is also a member of the Technical Advisory Group (TAG) for the International Financial Reporting for Non-Profit Organizations (IFR4NPO) Project – which has a role of developing non-mandatory internationally-applicable financial reporting guidance for Not-for-Profit Organisations (NPOs). 

The International Ethics Standards Board for Accountants (IESBA) invites stakeholders to its global webinar on its recently released pronouncement, Revisions to the Definitions of Listed Entity and Public Interest Entity in the Code.

• The webinar is scheduled for May 25, 10am EDT. Click here to register.

The one-hour live-streamed event will be presented by Mike Ashley, IESBA Public Interest Entity (PIE) Task Force Chair, and Andrew Mintzer, IESBA PIE Rollout Working Group Chair.

The revised provisions extend the scope of application of additional independence requirements for audits of financial statements of PIEs through enlarging the universe of entities that are PIEs. The revised provisions recognize the essential role relevant local bodies play in identifying the specific entities that should be scoped in as PIEs in their jurisdictions, encouraging them to properly refine the PIE categories in the expanded IESBA definition and adding any other PIE categories relevant to their environments. The revised provisions provide guidance to the local bodies in this regard. There is also a new transparency requirement for firms to publicly disclose the application of independence requirements for PIEs where they have done so.

The webinar will be held in English and available on YouTube.

For more on how the IESBA is strengthening international independence standards, visit www.ethicsboard.org/strengtheingIIS

Recently, the IESBA hosted two global webinars on the Board's exposure draft, Proposed Revisions to the Code Relating to the Definition of Engagement Team and Group Audits. Both webinars provided an overview of the exposure draft and opportunities for stakeholders to participate in a questions and answers session with the presenters. 

• Click here for the April 11 Webinar: presented by Ms. Caroline Lee, IESBA Deputy Chair and Chair of the IESBA’s Engagement Team – Group Audits Independence (ET-GA) Task Force, and Ms. Denise Canavan, former IESBA Technical Advisor and member of the ET-GA Task Force
• Click here for the April 19 Webinar: presented by Ms. Caroline Lee and Mr. Andrew Pinkney, IESBA Technical Advisor and member of the ET-GA Task Force

The proposals in the Exposure Draft establish provisions that comprehensively address independence considerations for firms and individuals involved in an engagement to perform an audit of group financial statements. The proposals also address the independence implications of the change in the definition of an engagement team―a concept central to an audit of financial statements―in the International Auditing and Assurance Standards Board's (IAASB) International Standard on Auditing (ISA) 220, Quality Management for an Audit of Financial Statements. The proposals were developed in close coordination with the IAASB's group audits and quality management projects.

Comments to the exposure draft are requested by May 31, 2022.

The International Ethics Standards Board for Accountants (IESBA) today released a public survey seeking broad stakeholder input to inform the development of its Strategy and Work Plan (SWP) 2024-2027. The survey can be downloaded from the IESBA’s website. Responses are requested by Friday, July 8, 2022.

“The accountancy profession plays a critically important role in supporting economic growth and stability worldwide in these uncertain and rapidly changing times,” said IESBA Chair Gabriela Figueiredo Dias. “The IESBA must therefore be open, agile and proactive in evolving the Code so that it remains robust and relevant in safeguarding public trust and confidence in the work of professional accountants as the context and the challenges change. The ultimate purpose of IESBA’s future SWP is to actively respond to the changing needs of the economic system by providing appropriate and relevant standards for professional accountants as they adapt their professional activities and work methods and evolve their services to meet those changing needs.”

The survey seeks input from all stakeholders on what key trends, developments or issues the IESBA should consider as it begins the process of developing its SWP 2024 – 2027. The SWP is expected to be finalized by the end of 2023 for release in early 2024.

Click here for more information. 

The International Ethics Standards Board for Accountants (IESBA) today released a revised definition of a PIE together with other revised provisions in the International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code). The revised provisions specify a broader list of categories of entities as PIEs whose audits should be subject to additional independence requirements to meet stakeholders’ heightened expectations concerning auditor independence when an entity is a PIE.

“The concept of a PIE is central to the application of the IIS and determines how far an auditor must go in meeting the fundamental requirement to be independent,” said IESBA Chair Gabriela Figueiredo Dias. “The revised definition and related provisions represent the third pillar in our package of measures to significantly strengthen auditor independence in the public interest, following the release of our revised Non-Assurance Services and Fees standards last year.”

To recognize diversity in jurisdictional contexts, the IESBA has taken a novel approach of expanding the PIE definition globally at a high level while providing guidance to regulators, national standard setters and other relevant local bodies on tailoring the broad definition for jurisdictional specificities. Among other matters, the revisions also:

• Articulate an overarching objective for additional independence requirements for audits of financial statements of PIEs.
• Provide guidance on factors to consider when determining the level of public interest in an entity.
• Replace the term “listed entity” with a new term “publicly traded entity,” providing a definition of the latter term.
• Recognize the essential role local bodies responsible for the adoption of the Code play in delineating the specific entities that should be scoped in as PIEs in their jurisdictions, encouraging them to properly refine the PIE categories and adding any other categories relevant to their environments.
• Introduce a transparency requirement for firms to publicly disclose the application of independence requirements for PIEs where they have done so.

The IESBA coordinated the development of these revisions closely with the International Auditing and Assurance Standards Board (IAASB) given that some of the terms and concepts that were considered are common to both Boards’ standards. The IAASB is pursuing a project to consider a number of matters relevant to its standards arising from the finalization of the IESBA’s PIE provisions, including whether and how to address the transparency requirement noted above in the IAASB’s standards.

The revised PIE definition and related provisions become effective for audits of financial statements for periods beginning on or December 15, 2024. Early adoption is permitted and encouraged.

The IESBA is also releasing a number of conforming amendments to the Code as a result of the issuance of the IAASB’s suite of quality management standards in December 2020. These conforming amendments will be effective as of December 15, 2022.

In December 2020, the International Auditing and Assurance Standards Board (IAASB) issued its suite of quality management standards (ISQM 1, ISQM 2, and ISA 220 (Revised)). As a result of the finalization of those standards, the IESBA considered it is necessary to make certain conforming amendments to the Code.   

These conforming amendments will be effective as of December 15, 2022.

The revised provisions include an expanded definition of “public interest entity” (PIE) in the Code by specifying a broader list of PIE categories, including a new category “publicly traded entity” to replace the category “listed entity.” The revised provisions also recognize the essential role local bodies responsible for the adoption of the Code play in delineating the specific entities that should be scoped in as PIEs in their jurisdictions, encouraging them to properly refine the PIE categories in the expanded definition and adding any other categories relevant to their environments.