• Ethics Board Proposes Strengthened Guidance for Professional Accountants in Business

    New York, New York English

    The International Ethics Standards Board for Accountants® (IESBA®, the Ethics Board) today released for public comment the Exposure Draft (ED), Proposed Changes to Part C of the Code Addressing Presentation of Information and Pressure to Breach the Fundamental Principles. The proposals respond to the need for more robust and practical guidance to help professional accountants in business (PAIBs) deal with two matters on which they most often seek assistance in practice: their responsibility to produce financial reports that are faithful representations of the economics of transactions, and pressure to breach fundamental ethical principles.

    “PAIBs play an important role in the financial reporting supply chain, and they may encounter pressure to act unethically. The proposed guidance will help them understand what their options are, and therefore better support them in fulfilling their responsibility to act in the public interest,” said interim IESBA Chair Wui San Kwok. “The proposal also clarifies that when preparing financial information, exercising discretion—for example, when selecting an accounting method—in a manner that is intended to mislead is not acceptable.

    Among the proposed changes are:

    • Fuller and more explicit guidance regarding PAIBs’ responsibilities when presenting information;
    • Strengthened guidance on how a PAIB can disassociate from misleading information;
    • An expanded description of pressure that may lead to a breach of the fundamental principles in the Code of Ethics for Professional Accountants™ (the Code) together with practical examples to illustrate different kinds of situations in which such pressure may arise; and
    • New guidance to assist PAIBs in identifying and responding to pressure that could result in a breach of the fundamental principles.

    The Ethics Board is also proposing a number of related changes to other areas within Part C of the Code.

    “The development of this enhanced guidance reflects a rebalancing of the board’s focus to be more inclusive of PAIBs, a very large and important part of the accountancy profession,” noted IESBA Technical Director Ken Siong. “It will serve to remind PAIBs of some of the fundamental ethical principles by which they should be guided in their different roles within their organizations, and with which they must comply.”

    How to Comment
    The Ethics Board invites all those with an interest in international ethics standards for the accountancy profession to respond to the Exposure Draft. To access the ED and submit a comment, please visit the Ethics Board’s website at www.ethicsboard.org. Comments are requested by April 15, 2015. The Ethics Board encourages national and regional professional accountancy organizations to share the ED and encourage participation from their members and employees.

    About the IESBA
    The IESBA develops ethics standards and other pronouncements for professional accountants worldwide under a shared standard-setting process involving the Public Interest Oversight Board, which oversees the activities of the IESBA, and the IESBA Consultative Advisory Group, which provides public interest input into the development of the standards and other pronouncements. The structures and processes that support the operations of the IESBA are facilitated by IFAC. Please visit www.ethicsboard.org for more information, and follow us on Twitter @Ethics_Board.

    About IFAC®
    IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of over 175 members and associates in 130 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

  • 2013 IESBA Annual Report: Reinforcing Trust in the Profession

    The report provides a summary of the Ethics Board’s 2013 achievements and includes developments on key projects and initiatives that have continued to progress throughout 2014. In particular, it highlights the board’s extensive efforts in reaching out to stakeholders, and the developments of the board that centered on building public trust in both the profession and the IESBA’s Code of Ethics for Professional Accountants (the Code).

    IESBA
    English

  • IESBA Releases 2013 Annual Report: Reinforcing Trust in the Profession

    New York, NY English

    The International Ethics Standards Board for Accountants® (IESBA®, the Ethics Board) today released its 2013 Annual Report, Reinforcing Trust in the Profession.

    The report provides a summary of the Ethics Board’s 2013 achievements and includes developments on key projects and initiatives that have continued to progress throughout 2014. In particular, it highlights the board’s extensive efforts in reaching out to stakeholders, and the developments of the board that centered on building public trust in both the profession and the IESBA’s Code of Ethics for Professional Accountants (the Code).

    The 2013 Annual Report pays tribute to the board’s late chair Jörgen Holmquist and includes a number of key messages that he had expressly wished to convey prior to his passing in March 2014, including the importance of maintaining the board’s focus on setting principles-based standards that are globally operable.

    “Ethics is the foundation on which public trust in the accounting profession is built. For this reason, the ethics standards in the Code play a critical role in supporting professional accountants globally in fulfillment of their responsibility to act in the public interest,” said Wui San Kwok, interim IESBA chair. “The board, under Jörgen’s leadership, made significant strides in 2013 in advancing its technical agenda to ensure that the Code remains a set of high-quality, globally accepted ethics standards, and in forging broader and deeper relationships with its constituencies through its outreach program. The board is committed to continuing this momentum, including promoting the Code and its widespread adoption.”

    The Annual Report includes a report from Kristian Koktvedgaard, the chair of the IESBA’s Consultative Advisory Group (CAG), which outlines the technical and strategic input the CAG provided to the Ethics Board on its work program initiatives during the year.

    To access and download the 2013 IESBA Annual Report, visit www.ethicsboard.org.

    About the IESBA
    The IESBA develops ethics standards and other pronouncements for professional accountants worldwide under a shared standard-setting process involving the Public Interest Oversight Board, which oversees the activities of the IESBA, and the IESBA Consultative Advisory Group, which provides public interest input into the development of the standards and other pronouncements. The structures and processes that support the operations of the IESBA are facilitated by IFAC. Please visit www.ethicsboard.org for more information, and follow us on Twitter @Ethics_Board.

    About IFAC®
    IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of over 175 members and associates in 130 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

  • IESBA Consults on Restructuring Code of Ethics for Professional Accountants; Focuses on Improved Usability

    New York, New York English

    The International Ethics Standards Board for Accountants® (IESBA®, the Ethics Board) today released for public comment the Consultation Paper, Improving the Structure of the Code of Ethics for Professional Accountants™ (the Code). The paper seeks input from stakeholders on approaches that could be taken to improve the clarity and usability of the Code, thereby facilitating its adoption, effective implementation, and consistent application.

    Among the various matters on which the Ethics Board is consulting are:

    • Restructuring the Code to more clearly distinguish requirements from guidance;
    • Reorganizing the content of the Code, including rebranding the Code, or parts thereof, as international standards;
    • Identifying responsibility for compliance with the Code in particular circumstances; and
    • Simplifying the wording of the Code so that it can be more readily understood.

    “This is a seminal initiative which could result in a completely new presentation of the Code that would make it more accessible, understandable, and enforceable,” noted Interim IESBA Chair Wui San Kwok, adding, “These aims are central to enhancing the usability of the Code and thereby its further adoption globally in the public interest.”

    The paper includes illustrative examples of how a restructured Code might be presented. The input received from the consultation will supplement the Ethics Board’s research to date and inform its views of the way forward. This may in due course lead to the publication of an Exposure Draft containing the Ethics Board’s proposals for restructuring the Code and addressing any of the related issues set out in the paper.

    “The board has received strong support from stakeholders to take a fresh look at the structure of the Code as a priority,” said IESBA Technical Director Ken Siong. “The current thinking is that an improved structure would provide a platform for future development and maintenance of the Code, and allow for more user-friendly features, including increased search and query capabilities.”

    In connection with this project, a web-based version of the Code—to enhance accessibility and navigability—is currently in development and will be launched later this month.

    How to Comment
    The Ethics Board invites all stakeholders to comment on the Consultation Paper. To access the document and submit a comment, please visit the Ethics Board’s website at www.ethicsboard.org. Comments are requested by February 4, 2015.

    About the IESBA
    The International Ethics Standards Board for Accountants is an independent standard-setting board that develops and issues, in the public interest, high-quality ethical standards and other pronouncements for professional accountants worldwide. Through its activities, the IESBA develops the Code of Ethics for Professional Accountants, which establishes ethical requirements for professional accountants. The structures and processes that support the operations of the IESBA are facilitated by IFAC. Please visit www.ethicsboard.org for more information, and follow us on Twitter @Ethics_Board.

    About IFAC®
    IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 179 members and associates in 130 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

  • IESBA eNews: October 2014

    English

    Thank you for signing up to receive eNews from the International Ethics Standards Board for Accountants® (IESBA®, the Ethics Board). This edition provides a summary of topics discussed and decisions made at the Ethics Board’s meeting held October 13-15, 2014, in New York, New York, USA. See the Meeting Page for the meeting highlights, including a podcast summary and agenda papers. You can also subscribe to our podcast channel in iTunes and follow us on Twitter @Ethics_Board.   

    Structure of the Code

    The Ethics Board approved the Consultation Paper, Improving the Structure of the IESBA Code of Ethics for Professional Accountants (the Code). The paper consults on approaches that could be taken to improve the clarity and usability of the Code through revising its structure, thereby facilitating its adoption, effective implementation, and consistent application. Among other matters, the consultation is seeking stakeholders’ input on:

    • restructuring the Code by more clearly distinguishing requirements from guidance;
    • reorganizing the content of the Code, including rebranding it, or parts of it, as international standards;
    • using simpler language and shorter sentences; and
    • identifying a firm’s or an individual’s responsibility for compliance with the Code in particular circumstances to facilitate compliance and enforcement.

    The paper also includes illustrative examples to show how the restructured Code might be presented. The Consultation Paper will be released in the coming week and open for public comment through early-February 2015. In connection with this project, a web-based version of the Code—to enhance accessibility and navigability—is currently in development and is expected to go live in the coming weeks.

    Review of Part C of the Code

    The Ethics Board approved for exposure the following proposed changes to Part C of the Code, which addresses professional accountants in business (PAIBs):

    • Section 320—revisions dealing, in particular, with misuse of discretion when preparing or presenting financial information. The revisions include enhanced guidance on how discretion can be misused in a manner intended to mislead, and the PAIB’s actions when faced with misleading information.
    • Section 370—a new section to guide PAIBs on responding to pressure from superiors or others to breach the fundamental principles, and on not placing pressure on others that would result in a breach of the fundamental principles.

    Conforming changes have been proposed to other sections of Part C of the Code.

    The Exposure Draft is expected to be issued by mid-November 2014. Comments will be requested by mid-February 2015. As part of Phase 2 of this project, the Ethics Board will consider preliminary issues pertaining to a review of Section 350, addressing inducements, at its January 2015 meeting.

    Strategy and Work Plan

    In September, following approval by the Public Interest Oversight Board that due process had been followed, the Ethics Board released its Strategy and Work Plan, 2014-2018.

    The IESBA Strategy & Work Plan, 2014-2018 highlights the board’s priorities and planned actions toward achieving its objective of setting high-quality ethics standards for professional accountants that are widely adopted around the world. The Strategy and Work Plan lays out four inter-connected strategic themes that articulate the board’s vision over the medium to longer term:

    • maintaining a high-quality Code for application by professional accountants globally;
    • promoting and facilitating the adoption and effective implementation of the Code;
    • evolving the Code for continued relevance in a changing global environment; and
    • increasing engagement and cooperation with key stakeholders.

    A separate Basis for Conclusions has been prepared by staff to accompany the Strategy and Work Plan. 

    Responding to Suspected Non-Compliance with Laws & Regulations

    The Ethics Board considered the feedback received from its three global roundtables, held in Hong Kong, Brussels, and Washington DC earlier this year, on its project addressing professional accountants’ responsibilities to respond to suspected non-compliance with laws and regulations (NOCLAR). It also considered Task Force proposals regarding a revised framework for how auditors, professional accountants in public practice providing non-assurance services, senior-level PAIBs, and other PAIBs could respond to suspected NOCLAR.

    The Ethics Board will discuss a revised draft of the proposed new sections (225 and 360), and related changes to other sections of the Code, at its January 2015 meeting in preparation for re-exposure by mid-2015. 

    Non-Assurance Services

    The Ethics Board considered significant comments received on its Exposure Draft, Proposed Changes to Certain Provisions of the Code Addressing Non-Assurance Services for Audit Clients, and related Task Force proposals, aimed at enhancing the independence provisions in Section 290 (Independence—Audit and Review Engagements). The discussion focused on the three areas covered by the Exposure Draft:

    • the proposed withdrawal of the emergency exception provisions pertaining to bookkeeping and taxation services provided to audit clients that are public interest entities (PIEs);
    • additional guidance on safeguards on and clarification regarding what constitutes management responsibility; and
    • enhanced guidance and clarification on the concept of “routine or mechanical” services relating to the preparation of accounting records and financial statements for non-PIE audit clients.

    The Ethics Board will seek input from its Consultative Advisory Group in November 2014 regarding the significant comments received on the Exposure Draft and the board’s indicative direction forward on the key issues. The Ethics Board will consider a revised draft of the proposed changes to the Code with a view to approval at its January 2015 meeting.

    2014 Handbooks from 4 Standard Setters—Now Available!

    The 2014 editions of the handbooks from the following boards supported by the International Federation of Accountants® (IFAC®) are now available:

    • International Auditing and Assurance Standards Board® (IAASB®);
    • International Accounting Education Standards Board™ (IAESB™);
    • International Ethics Standards Board for Accountants® (IESBA®); and
    • International Public Sector Accounting Standards Board® (IPSASB®).

    To access electronic copies of the handbooks for personal use, purchase print copies, or find information on recent developments and outstanding Exposure Drafts and Consultation Papers from each of the boards, visit their respective web pages: www.iaasb.org, www.iaesb.org, www.ethicsboard.org, and www.ipsasb.org.

    The 2014 Handbook of the Code of Ethics for Professional Accountants incorporates several revised pronouncements that are now effective—addressing a breach of a requirement of the Code, conflicts of interest, and the definition of “those charged with governance.” It also contains the revised definition of “engagement team” (effective for audits of financial statements for periods ending on or after December 15, 2014). In connection with the Structure of the Code project (see above), a web-based version of the Code—with enhanced accessibility and navigability—is currently in development and expected to go live in the coming weeks. 

    Ethics Resources, Discussions & News in Global Knowledge Gateway

    Earlier this year, the International Federation of Accountants (IFAC) launched the Global Knowledge Gateway™, a new digital hub for the global accountancy profession: www.ifac.org/global-knowledge-gateway. The Gateway serves professional and aspiring accountants in all sectors by providing streamlined access to relevant resources, news, discussions, and thought leadership in nine different areas, including ethics. Resources in this area, designed to serve both accountants in business and in practice, include surveys and reports on business ethics issues, as well as practical guidance on implementing the IESBA Code and other codes of conduct.

    We invite you to explore and contribute your views to the discussions, recommend content that you find the most useful, suggest new resources, and subscribe to receive customized updates on new content added to the Gateway. Register to take full advantage of all of these features. 

    The Ethics Board Is Tweeting

    Several months ago, the Ethics Board launched a Twitter handle to increase engagement with the public and with professional accountants worldwide, enhance its profile and brand, and increase the transparency and timeliness of its communications. Stay current on the Ethics Board’s projects, publications, and meeting decisions, as well as the latest accounting and business ethics news, trends, and resources from around the world. We hope you’ll stay connected and join us: @Ethics_Board.

    Next Meetings

    Meetings of the Ethics Board and the Ethics Board’s Consultative Advisory Group (CAG) are open to the public. The next meeting of the board will be held in London, United Kingdom, on January 12–14, 2015. The next CAG teleconference will be held on November 18, 2014, and the next physical CAG meeting will be held in New York, New York, USA, on March 10–11, 2015.

    For more information and to register to attend an Ethics Board or Ethics Board CAG meeting as an observer, visit Ethics Board Meetings and Ethics Board CAG Meetings respectively.

    Last Chance to Register—World Congress of Accountants 2014, Agenda Includes Ethics Issues

    The 2014 World Congress of Accountants (WCOA) will be hosted by the Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (CNDCEC) in Rome, Italy, November 10-13. Themed 2020 Vision: Learning from the Past, Building the Future, the WCOA 2014 will be held at the Auditorium Parco della Musica. Almost 4,000 professionals from around the world will convene at this quadrennial IFAC event. WCOA 2014 will look back to explore the evolution of the accountancy profession and forward to showcase the innovations that will shape its future. Days 2 and 3 feature sessions on ethics: “Fighting Corruption and Fraud: The Role of Professional Accountants” and “Code of Ethics: Shaping Behavior.” View the full agenda and register here.

    Online registration closes October 31, 2014. If you are unable to register on the website, please contact the WCOA Secretariat: wcoa2014@adriapoint.it.

  • IESBA October 2014 Meeting Highlights

    New York, New York English

    Highlights from the IESBA's October 13-15, 2014, meeting in New York, USA.

    :55 - Chair highlights

    3:05 - Structure of the Code

    4:59 - Exposure Draft Part C

    7:30 - Responding to Non-Compliance with Laws and Regulations

     

    13:00 - Conclusion and Next Meeting 

    Meeting Highlights Listen & Subscribe in iTunes

  • Ethics Board Welcomes Appointment of Stavros Thomadakis as Chair; Publishes 5-Year Strategy & Work Plan

    New York, New York English

    Dr. Stavros B. Thomadakis has been appointed chair of the International Ethics Standards Board for Accountants® (IESBA®, the Ethics Board), beginning January 1, 2015 for a three-year term. Dr. Thomadakis’ appointment has been approved by the Public Interest Oversight Board* (PIOB).

    Dr. Thomadakis’ professional career includes a 40-year tenure as professor of financial economics at the University of Athens, the City University of New York, and MIT, as well as a number of regulatory and oversight roles. He brings familiarity with the Ethics Board in an oversight capacity, having served as the first chair of the PIOB from 2005 to 2011. He is a current member of the Securities Markets Stakeholders Group of the European Securities Market Authority. Additionally, he has chaired both the Capital Market Commission of Greece and the European Regional Committee of the International Organization of Securities Commissions, and he is currently chair of the Board of the University of the Aegean.

    As chair of the Ethics Board, Dr. Thomadakis will lead the board in the implementation of its newly published Strategy and Work Plan, 2014-2018 (see below). A key function of the chair is to enable and promote a deeper understanding by stakeholders and the public of the strategy and activities of the Ethics Board. The chair also coordinates the deliberative and consultative processes of the board; moreover, he develops and maintains effective relationships with regulators, the preparer, investor and corporate governance communities, national standard setters, the accountancy profession, and other key stakeholders.

    “Ethics standards are a foundation of trust in the accounting profession and essential to its fulfilling the responsibility to act in the public interest. It is an honor to lead the work of the Ethics Board. I am looking forward to advancing the board’s agenda and particularly to continuing the extended outreach program initiated by the late chair, Jörgen Holmquist, whose dedication and leadership will not be soon forgotten,” said Mr. Thomadakis.

    The Ethics Board also today released its Strategy and Work Plan, 2014-2018. The publication highlights the board’s priorities and planned actions toward achieving the objective of setting high-quality ethics standards for professional accountants that are widely adopted around the world.

    The Strategy and Work Plan lays out four inter-connected strategic themes that articulate the board’s vision over the medium to longer term:

    • maintaining a high quality Code of Ethics for Professional Accountants™ (the Code) for application by professional accountants globally;
    • promoting and facilitating the adoption and effective implementation of the Code;
    • evolving the Code for continued relevance in a changing global environment; and
    • increasing engagement and cooperation with key stakeholders.

    “The Code has now been adopted or used as the basis for national ethics standards in over 100 jurisdictions around the world. Continued strengthening of the Code, and thereby moving toward even greater acceptance of and global convergence with the Code, is at the heart of our five-year Strategy and Work Plan,” noted Interim Chair Wui San Kwok, adding, “Importantly, the board is determined through the Strategy and Work Plan to reinforce public trust in the Code and to ensure that it continues to remain relevant in supporting the diverse and vital roles that professional accountants play in the public interest.”

    The Strategy and Work Plan was developed with input from a wide range of stakeholders, including a survey of stakeholders and a public Consultation Paper.

    To access the entire Strategy and Work Plan and to learn more about the board’s projects, visit the Ethics Board’s website: www.ethicsboard.org.

    *Note to Editors

    The Public Interest Oversight Board (PIOB) was established in February 2005 to ensure that international auditing and assurance, ethics, and education standards for the accountancy profession are set in a transparent manner that reflects the public interest. The objective of the PIOB is to increase confidence of investors and others that such activities, including the setting of standards by the IESBA, are properly responsive to the public interest. PIOB members are nominated by international institutions and regulatory bodies.

    About the IESBA

    The International Ethics Standards Board for Accountants is an independent standard-setting board that develops and issues, in the public interest, high-quality ethical standards and other pronouncements for professional accountants worldwide. Through its activities, the IESBA develops the Code of Ethics for Professional Accountants, which establishes ethical requirements for professional accountants. The structures and processes that support the operations of the IESBA are facilitated by IFAC. Please visit www.ethicsboard.org for more information, and follow us on Twitter @Ethics_Board.

    About IFAC

    IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 179 members and associates in 130 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

  • IESBA Strategy & Work Plan, 2014-2018

    The IESBA Strategy & Work Plan, 2014-2018 highlights the board’s priorities and planned actions toward achieving its objective of setting high-quality ethics standards for professional accountants that are widely adopted around the world. 

    The Strategy and Work Plan lays out four inter-connected strategic themes that articulate the board’s vision over the medium to longer term:

    IESBA
    English
Subscribe to IESBA