The International Ethics Standards Board for Accountants (IESBA) today released its Phase One Report exploring the ethical implications of technology on the accounting, assurance, and finance functions.

The report is the culmination of the first phase of fact-finding work the global ethics standard-setting board initiated in recognition of the pace and magnitude of change caused by disruptive technological innovations. The initial phase of the initiative was led by the IESBA’s Technology Working Group (TWG).

In its findings, the TWG concluded that, generally, the IESBA’s International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code) currently provides high level, principles-based guidance for most technology-related ethics issues that professional accountants and firms might encounter. However, the report cites various findings and sets out recommendations grouped into five key topical areas where material in the Code could be enhanced.

“Over the last few years, the pace, significance and complexity of technology advances, such as machine learning, have given rise to new opportunities and challenges for the accountancy profession,” said Dr. Stavros Thomadakis, IESBA Chair, adding “The effective organization and delivery of services are already undergoing major change. The global accountancy profession will have to recognize and address new ethical challenges in a rapidly changing technological environment. The IESBA Technology Working Group has delivered a comprehensive and informative report in this strategic area. This lays the groundwork for our substantive and timely response to ethical and public interest challenges posed by radical technological change.”

The report also includes other recommendations for the next phase of the initiative, including that the IESBA conducts additional information gathering with respect to the ethical implications of other technological developments such as blockchain, cybersecurity and Internet of Things.

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All stakeholders are invited to register and participate

Feb 12, 2020 | New York, New York | English

Today, the International Ethics Standards Board for Accountants^® (IESBA^®) announced the dates for two webinars focused on the recently released Exposure Drafts, with proposals relating to Non-assurance services (NAS) and Fees that further reinforce auditor independence.

Please click below to register and join us for each 60-minute webinar event.

• Tuesday, March 17, 2020 from 8:30 a.m. to 9:30 a.m. EST; Overview of Proposed Revisions to the Non-Assurance Services Provisions of the Code

• Thursday, March 19, 2020 from 10:00 a.m. – 11:00 a.m. EST; Overview of Proposed Revisions to the Fee-Related Provisions of the Code.   

During the March 17 webinar, the NAS Task Force Chair, Mr. Richard Fleck, will explain the key NAS proposals, including:

• A prohibition on providing NAS to an audit client that is a public interest entity (PIE) if a self-review threat to independence will be created;
• Further tightening of the circumstances in which materiality may be considered in determining the permissibility of a NAS;
• Strengthened provisions regarding auditor communication with those charged with governance (TCWG), including, for PIEs, a requirement for NAS pre-approval by TCWG; and
• Stricter requirements regarding the provision of some NAS, including certain tax and corporate finance advice.

During the March 19 webinar, the Fees Task Force Chair Mr. Ian McPhee, will explain the significant aspects of the fee-related proposals which include:

• A prohibition on firms allowing the audit fee to be influenced by the provision of services other than audit to the audit client;
• In the case of PIEs, a requirement to cease to act as auditor if fee dependency on the audit client continues beyond a specified period; and
• Communication of fee-related information to TCWG and to the public to assist their judgments about auditor independence.

Don’t miss out on this unique opportunity to engage with representatives of the IESBA and learn more about the NAS and fee-related proposals.

The IESBA welcomes feedback on the NAS and Fees EDs from all stakeholders, including investors and other users of financial statements, the corporate governance community, the regulatory and audit oversight community, preparers, firms, national standard setters, IFAC member bodies, academics and others.

The comment deadline for the NAS and Fees Exposure Drafts is May 4, 2020.

If you have any questions, please email Szilvia Sramko at szilviasramko@ethicsboard.org.

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).