This article first appeared in Auditores, the magazine of the Instituto de Censores Jurados de Cuentas de España (ICJCE), the professional body in Spain and a member of IFAC.

Why is the IESBA considering a review of the structure of its Code of Ethics for Professional Accountants (the Code)?

Well, we have heard from a number of stakeholders, particularly small- and medium-sized practices (SMPs) and professional accountants working in small- and medium-sized entities (SMEs), about the challenges they face in understanding and applying the requirements in the Code. Let’s be clear—the Code contains robust standards on ethics for the accounting profession. But after years of evolution, the Code has become a complex set of standards, with sections that contain long paragraphs and sentences that many find difficult to understand and translate. At the same time, we have heard from our regulatory stakeholders about the need to increase the visibility of the requirements and prohibitions in the Code, and to clarify who is responsible for meeting them, in order to facilitate enforcement. So we are responding to the concerns by taking a fresh look at the structure of the Code to see if there are ways to enhance its readability, understandability, and accessibility, and assist in its enforcement. So, in essence, it is an effort at modernizing the Code.

However, I must make clear that our initiative to review the structure of the Code is not intended to introduce changes to the basic principles and rules in the Code. While we are considering the feasibility of making the requirements and content of the Code more accessible, by different means, we are NOT planning any changes to the Code itself in the short term. The changes in the structure of the Code will be for the long term, after we have launched a full consultation and achieved buy-in from our stakeholders.

In difficult times such as these, is the auditor providing enough assurance on the veracity of financial information supplied by companies? Is the audit profession helping to restore confidence?

The role of the audit profession has really never changed, in times of economic boom or bust—the profession has always been, and will continue to be, a watchdog protecting the public interest. That is why, in most jurisdictions, auditors are granted a statutory mandate to carry out audits. The essential responsibility of auditors is to express an independent opinion on the truth and fairness of a company’s financial statements. It is the independence with which auditors fulfill their role that gives credibility and adds value to their audit opinions. But in the difficult times we live in, there are continual challenges (or threats, to use our jargon) to auditors’ independence. The Code demands that auditors implement appropriate safeguards to protect their independence against such challenges. So, yes, the audit profession absolutely has a critical role to play in restoring confidence in the financial markets—and the public has a right to expect that it fulfills this role in full compliance with ethical requirements, including independence.

But let’s not forget that the environment in which auditors operate is dynamic, so new threats to their independence can always arise. That is why we must be on our guard and make sure that the Code is capable of evolving to address new challenges.

What are the main conflicts of interest that may be encountered by auditors during the planning stage?

First, let’s be clear that a conflict of interest creates a threat to the auditor’s objectivity and may create threats to other fundamental ethical principles. Conflicts of interest may arise in various circumstances, and I would not say that there are some types of conflicts that are necessarily more common than others. But in an audit context, some of the conflicts one might encounter include, for example, auditing royalties payable by the audit client to a licensor owned by the engagement partner’s immediate family, or using confidential information obtained when planning the audit of the client for purposes of a due diligence service for another client that is considering acquiring the audit client.

One of the main recent changes to the Code was better identification of the circumstances in which a professional accountant may encounter potential conflicts of interest. Are these circumstances newly identified or were they in need of better definition?

I would say it is closer to the latter. The Ethics Board concluded that it would be difficult to develop a definition that would be sufficiently broad to encompass the diverse activities of professional accountants but that would be sufficiently precise to avoid capturing situations that are not conflicts of interest. Accordingly, it determined that it would be more appropriate to provide a more comprehensive description of circumstances that might create a conflict of interest, together with supporting examples to facilitate implementation.

Issues related to auditors’ insider information are detailed in the Code. What are the improvements on this matter?

Quite apart from the strict laws that exist in most jurisdictions regarding insider trading, the Code has always taken a strong position regarding the inappropriate use of insider information. In particular, paragraph 140.1(b) of the Code prohibits auditors from using confidential information acquired as a result of professional and business relationships to their personal advantage or the advantage of third parties. Equally, paragraph 340.3 of the Code prohibits professional accountants in business from using confidential information for personal gain. So the Code’s position on this matter is unequivocal, and that must be right. Insider trading, however, defined in national laws and regulations, is unethical and harmful to society, and must be rigorously sanctioned when it occurs.

Audit regulation is currently being discussed at different international strata, with particular focus on the question of independence. Don’t you think that compliance with the Code is enough to curtail the potential risks?

Well, the Ethics Board certainly believes the Code provides a robust set of independence rules for global application. We completed two significant projects four to five years ago that led to further strengthening of the independence requirements in the Code. So, many countries around the world, ranging from Australia, Brazil, and China to Japan and South Africa, have benchmarked or aligned their independence requirements with those in the Code. Even with respect to the EU, a February 2013 study from the Fédération des Experts Comptables Européens (FEE) revealed that the independence provisions in the Code are more robust with respect to audits of public interest entities (PIEs) than those in the current EU frameworks on auditor independence. So I believe the Code will stand up to scrutiny.

But of course, we have to respect the sovereignty of nations to review their independence frameworks as they consider necessary, particularly in the aftermath of the global financial crisis, to satisfy themselves that these continue to safeguard auditor independence. So I welcome the debates on independence in the various forums, and that can only be in the public interest. This is not to suggest that the Ethics Board is content with the status quo as far as the Code is concerned. Far from it, we have commenced projects to review the provisions in the Code, addressing long association of senior personnel with an audit client, and the provision of non-assurance services to audit clients. But let me be clear that we are not prejudging from these projects that changes will be needed in these areas. However, we want to make sure that our requirements continue to support auditor independence in a robust and appropriate way.

Do you consider it necessary for IESBA to open a debate on issues related to the independence of the auditor and on the provision of services other than audit, precisely now that these issues are being reviewed by other regulatory entities on an international basis?

It is important to remember that the Ethics Board does not set standards in a vacuum. We recognize that the external environment may evolve very rapidly and we must be prepared to take action as needed. So, we carefully monitor emerging issues or developments internationally that may be of relevance to our work, and discuss the implications of the most significant ones for our strategy and work program. We may decide after careful analysis of environmental developments and discussions with our stakeholders that adjustments to our strategy are necessary, as we did last year when we added four new work streams to our current strategy. But this doesn’t mean we commence a project to respond to every emerging issue or development—our resources are finite after all and must be carefully managed. However, as I noted above, we have already started projects in the areas of long association and non-assurance services to determine whether changes to the Code are needed to further strengthen auditor independence.

Do you deem it necessary for audit companies to strengthen their Chinese walls (professional confidentiality both for employees as well as a physical separation of the technologies or the working teams) among their different divisions? Please, could you detail any necessary procedures?

The Code’s provisions addressing the fundamental principle of confidentiality are clear. Paragraph 140.4 requires a professional accountant to maintain confidentiality of information within the firm. Paragraph 140.5 requires a professional accountant to take reasonable steps to ensure that staff under the professional accountant’s control and persons from whom advice and assistance is obtained respect the professional accountant’s duty of confidentiality. It is the responsibility of the audit firms to take whatever actions are necessary to comply with these requirements, including segregating teams on different engagements as needed, and protecting the confidentiality of documentation containing client information.

Do you think that setting a cap on the percentage of revenues that may derive from one single client as a general rule, both for public interest entities (PIEs) and small- and medium-sized entities (SMEs), resolves the independence problem? Or would it rather be desirable in the case of SMEs, so as to avoid this problem, to apply the safeguards of the IESBA Code, such as increasing quality controls?

The tool has to fit the purpose. The level of public interest in the audit of a PIE will of course be different from the audit of an SME. So a one-size-fits-all approach may not necessarily be the right answer in every case. That is why I believe the threats and safeguards approach in the Code with respect to evaluating the impact of fees from a given client on independence is the right one. In particular, paragraph 290.220 of the Code states that when the total fees from an audit client represent a large proportion of the total fees of the firm expressing the audit opinion, the dependence on that client and concern about losing the client creates a self-interest or intimidation threat. The Code explains that the significance of the threat will depend on various factors such as the operating structure of the firm and the significance of the client qualitatively and/or quantitatively to the firm. The Code in this case requires the firm to evaluate the significance of the threat and apply appropriate safeguards to eliminate the threat or reduce it to an acceptable level. Among a number of possible safeguards could be to use external quality control reviews.

Of course, for PIEs, the Code already imposes a 15% cap on total fees from an audit client and its related entities relative to the total fees received by the firm as a whole. That is a position that the board believes is appropriate with respect to PIE audits.

How is the audit affected by the new definition of “engagement team” and to what extent has this been agreed with the ISAs?

The amendments to the definition of “engagement team” clarify the relationship between an external auditor’s use of internal auditors to provide direct assistance on the external audit in accordance with the International Auditing and Assurance Standards Board (IAASB)’s International Standard on Auditing (ISA) 610 (Revised 2013), Using the Work of Internal Auditors, and the meaning of an engagement team under the Code. The change to the definition should not affect audits because the sole purpose of the change is to eliminate a perceived inconsistency between the Code and the ISAs. In developing the change to the definition, I was pleased that the Ethics Board and the IAASB worked closely together to ensure that the amended definition would be fully consistent with the ISAs.

But of course, jurisdictions have different views on the appropriateness of using internal auditors to provide direct assistance on the external audit; the Code is not advocating one position or the other.

What sort of procedures will IESBA have to implement and maintain for the ISAs to be in agreement with the Code of Ethics?

Well, we certainly maintain close contact with the IAASB, and that is by necessity given that the Code and the ISAs are so closely linked. We have regular interactions with the IAASB at various levels—at the staff level, at the task force level (as we did on our project on the definition of “engagement team” and the IAASB’s project to revise ISA 610), and at the leadership level through quarterly meetings or teleconferences. We recognize the critical importance of these interactions as we are increasingly finding that issues being addressed on each board’s agenda have implications for the standards of the other board. I would also add that both boards have the benefit of the advice from their consultative advisory groups (CAGs), which have significant overlap in their memberships. As a result, the CAGs are often able to share ethics and audit perspectives on issues of mutual relevance to the two boards. So we do have processes internally to make sure that the Code and the ISAs stay aligned with each other as they evolve.

What are the main objectives for strengthening the Code in respect to the auditor’s actions upon encountering a breach of a requirement of the Code?

The Ethics Board released changes to the Code addressing a breach of a requirement of the Code in March 2013. The main objective of the project was to respond to a concern that the current provisions addressing an inadvertent breach of the Code, including independence requirements, could be misread as implying that all inadvertent breaches can be corrected by applying necessary safeguards. What we have now established in the Code is a robust framework, in particular for auditors to deal with breaches to the independence requirements of the Code. The provisions include strict requirements for communicating all breaches to those charged with governance and documentation.

What is the deadline to complete the revision of the Code of Ethics and to publish the final version?

The 2013 edition of the Handbook of the Code of Ethics for Professional Accountants will be available in May. This edition will contain the revised pronouncements addressing conflicts of interest, a breach of a requirement of the Code, and the definition of “engagement team,” which will take effect next year.

Do you consider that in today’s difficult financial environment, the auditor is satisfactorily fulfilling its public interest role and complying with ethics principles, such as honesty, independence, objectivity, and professional best practice?

Even though I am not an auditor or accountant and have never worked as one, I strongly believe that the vast majority of the audit profession live up to those principles. It helps that most auditors are required, often by law or regulation as a condition of their license, to go through rigorous training and develop core competencies, including a full understanding of the fundamental ethical principles that are the bedrock of the profession and are embodied in the Code. It is a fact of life, however, that in a very small minority of cases, members of any profession succumb to pressure to act unethically. This is when I strongly feel the disciplinary and enforcement regime in the particular jurisdiction should take action to deal with these isolated cases and prevent the profession as a whole from being cast into disrepute.

If you had to choose one single, fundamental ethics principle to rule over the professional activity of all auditors, what would it be?

That would be a fruitless task because no one fundamental principle overrides all the others. The five fundamental principles (integrity, objectivity, professional competence and due care, confidentiality, and professional behavior) that are established in the Code constitute one body of core principles that cannot be taken apart. Auditors must comply with each and all of them in every audit engagement they perform.

© Instituto de Censores Jurados de Cuentas de España (ICJCE). Spain. 2013.

This material belongs to ICJCE, therefore attributed to it all rights and related operating on it in any way, method or medium.

Highlights from the IESBA's June 10-12, 2013 meeting in New York.

0:33 Overview
2:00 Structure of the Code
5:42 Responding to a Suspected Illegal Act
9:34 Strategy & Work Plan

Jörgen, in an IFAC News interview from last August when you became the first independent chair of the International Ethics Standards Board for Accountants [IESBA], you indicated that the board has a clear role to play in responding to the global financial crisis, specifically in terms of helping to restore the reputation of the profession. Since the crisis, regulators and other policy makers have been actively exploring ways to enhance audit quality, including measures to increase the transparency of the audit process and to further safeguard auditor independence. At the same time, we have continued to witness a number of high profile accounting frauds in some jurisdictions. Some have said that the global financial crisis has led to a crisis of confidence in the accountancy profession. How can the IESBA’s Code of Ethics for Professional Accountants [the Code] help to restore the reputation of the profession?

JH: While the profession has not received as much criticism as the rating agencies and banks in relation to the global financial crisis, the profession is certainly not viewed as favorably as it was five years ago and there is still much work to be done. What many people outside of IFAC’s membership may not know is that professional accountants are committed to abiding by strict ethical requirements—the Code presents an internationally robust and comprehensive set of rules and guidelines for professional accountants. However, some accountants may choose not to follow the rules, and therein lies the problem. A relatively small number of accountants commit fraud, but that’s all you hear about in the news, and they end up hurting not only those directly involved, but the reputation of the entire profession.

What can be done about that?

JH: By increasing awareness of the Code and continuing to develop credible, reasonable solutions, we hope that the general public will come to realize that professional accountants are committed to acting ethically and in the public interest, and that fraudulent accountants constitute a small minority.

In some jurisdictions, the ethical requirements in the Code have been written into laws and regulations. However, there are some other incentives to follow the Code, regardless of legal requirements. It is in the best interests of all professional accountants, as members of a highly regarded and trusted profession, to help maintain the reputation of the profession. There are always going to be pressures—from management or potential financial gain, for instance—to stretch or break the rules. The Code includes guidance for professional accountants on how to deal with those situations. We expect that they will choose to do the right thing. Another motivator for firms and individuals to self-enforce the Code is that abiding by the Code can help them improve the consistency of their services and meet the high expectations of clients and employers.

How can the Code help in this way?

JH: As a global set of standards, the Code establishes a recognized benchmark for consistent ethical behavior by professional accountants worldwide. Clients and employers are rightly entitled to expect that professional accountants will act with integrity and objectivity, exhibit appropriate competence, due care, and professional behavior, and abide by the duty of confidentiality in carrying out their roles and responsibilities. Ethics standards can help professional accountants understand and meet their clients’ and employers’ expectations and therefore better serve them.

Do you agree that some of the recent accounting scandals that made headline news such as Olympus in Japan and ERA Mining Machinery Ltd in China were caused by compromised ethics?

JH: First, I should say that I, of course, do not have all of the information surrounding the cases you mention. Much of the information comes from the media. However, even when the news sources are highly respected, they may get the facts wrong or give incomplete coverage of events. While it looks like poor ethics played a role, I think it would be oversimplifying what happened to say that those scandals were caused mainly by a failure of the professional accountants involved to comply with ethics standards. To fully identify the causes would require a deep understanding of the particular facts and circumstances and the complexities of what occurred. At the same time, there is no doubt that those cases have hurt the standing of the profession in many jurisdictions. But it is important to distinguish between legal and ethical issues. Scandals usually become headlines because of suspected illegal activity—but acting illegally is of course very unethical.

Do you believe that ethics is something that cannot be taught, that it is inherent to each individual?

JH: I think most people have a personal code of conduct that they follow and it’s probably determined by how they were brought up, the morals and beliefs that were instilled in them from a young age, etc. I feel that ethical conduct is part of a person’s moral upbringing, so yes, part of it is inherent.

However, codes and rules in general, help the individual to adhere to ethical principles by supporting their intent to act ethically and guiding them in applying general ethical principles with concrete examples. The IESBA Code sets out the fundamental principles, a conceptual framework, and specific prohibitions. All professional accountants must be aware of the parts of the Code or their member body’s Code that are relevant to their work, which will be of help to them when they are facing issues of an ethical nature.

Can you give us a brief update on what the IESBA has going on right now?

JH: We recently released final revised provisions in the Code that address conflicts of interest, breaches of a requirement of the Code, and the Code’s definition of the term “engagement team.” The changes will be effective in 2014.

These projects were closely followed by a number of stakeholders from the regulatory community, and I was pleased that we were able to effectively engage with them through different forums. I was also pleased that we were able to successfully coordinate with the International Auditing and Assurance Standards Board [IAASB] in finalizing our project on the definition of engagement team, as this project was closely linked to the IAASB’s project to revise its International Standard on Auditing 610, Using the Work of Internal Auditors.

In relation to our current agenda, we had our first deliberation at our last meeting regarding the significant comments to our Exposure Draft on responding to a suspected illegal act, our most important project. Certainly, there are a number of challenging issues that respondents have raised. We will work diligently, systematically, and thoroughly through all the responses as we determine a way forward. We also discussed a number of new projects and initiatives at our March meeting.

See more information on the March 2013 Meeting Page, which includes the meeting highlights and a podcast summary. 

Objective

To identify and recommend to the Board ways to improve the clarity and usability of the Code, thereby facilitating its adoption, effective implementation and consistent application.

The IESBA handbook contains the entire Code of Ethics for Professional Accountants, effective January 1, 2011. The 2013 edition includes the three final pronouncements—addressing a breach of a requirement of the Code, conflicts of interest, and the definition of "engagement team"—published in March 2013 (effective dates in 2014). It replaces the 2012 edition of the IESBA handbook.

The handbook is available in print for US $60.00 (plus shipping & handling). Order print copies using the Purchase button.

Gracias por registrarse para recibir el eNews del Consejo de Normas Internacionales de Ética para Contadores (IESBA). Esta edición del eNews del IESBA ofrece un resumen de decisiones tomadas durante la junta del IESBA llevada a cabo en marzo 11-13 de 2013, en Nueva York, Estados Unidos. Referirse a la Página de la junta para visualizar los puntos destacados de la junta, incluyendo un resumen en versión podcast y documentos de la agenda. 

1. Respondiendo a un Acto Ilegal Sospechado
2. Asociación de Personal Directivo (incluyendo Rotación de Socios) con un Cliente de Auditoría
3. Revisión de la Parte C del Código
4. Estructura del Código
5. Definición de Los Encargados del Gobierno Corporativo
6. Asuntos Emergentes y Alcance
7. Servicios Diferentes al Aseguramiento
8. Próximas Juntas
9. Directriz Reglamentaria de la CE vs. Código del IESBA: la FEE Compara los Requerimientos de Independencia
10. El IESBA está Contratando
11. Manual IESBA 2013
12. Congreso Mundial de Contadores 2014 se Llevará a Cabo en Roma; Oportunidades de Patrocinio Disponibles

1. Respondiendo a un Acto Ilegal Sospechado

El IESBA consideró los comentarios de más de 70 replicantes al Borrador de Consulta (ED), Respondiendo a un Acto Ilegal Sospechado. Entre los temas abarcados, se incluyó: la divulgación de un acto ilegal sospechado a la autoridad adecuada; la divulgación al auditor externo, con la expectativa de divulgación a la autoridad adecuada; la prueba de información e intensificación del “interés público”; el requerimiento para confirmar o disipar la sospecha; los tipos de actos ilegales a ser revelados; y la interacción de la norma propuesta con las Normas Internacionales de Auditoría (NIAs).  

El IESBA continuará considerando los temas claves y las acciones futuras durante su junta de Junio de 2013.

2. Asociación de Personal Directivo (incluyendo Rotación de Socios) con un Cliente de Auditoría 

El IESBA recibió una actualización sobre el proyecto de revisión de las largas provisiones de asociación incluidas en la Sección 290 del Código de Ética para Contadores Profesionales (el Código) a fin de garantizar que continúan proporcionando una protección contra la familiaridad y las amenazas de auto-interés que surgen de la larga asociación con el cliente de auditoría. Entre otros asuntos, el IESBA abarcó el enfoque para la investigación de las provisiones sobre la rotación de socios en los territorios principales y el sondeo de las opiniones de las partes interesadas sobre las amenazas asociadas con la asociación.

3. Revisión de la Parte C del Código

El IESBA aprobó una propuesta para iniciar un proyecto de revisión de la Parte C del Código que considera a los Contadores Profesionales en Empresas (PAIB) a fin de garantizar que las provisiones de la Parte C del Código son sólidas y adecuadas. La Fase I del proyecto revisará las Secciones 300, 320, 330, y 340 del Código. Particularmente, esta fase se enfocará en la presión aplicada por los superiores y demás para dedicarse a actos ilegales y poco éticos, la responsabilidad de los PAIB en la producción de estados financieros que representen de manera fiel los aspectos económicos de las transacciones, y demás asuntos relacionados. La fase II del proyecto abarcará la Sección 350, la cual está relacionada con pagos fáciles y sobornos. El IESBA desarrollará más a fondo el proyecto en su junta de Junio de 2013.

4. Estructura del Código

El IESBA consideró términos de referencia y un informe de estatus inicial del grupo de trabajo creado para asesorar al Consejo sobre las maneras en que se puede mejorar la lectura, el entendimiento y el acceso al Código. Entre otros asuntos, el IESBA debatió sobre los objetivos, el alcance y los tiempos de la iniciativa, al igual que el enfoque frente al trabajo. El consejo acordó que era necesario reflexionar cuidadosamente sobre la distinción a hacer entre las opciones que se podrían considerar a corto plazo y aquellas que se podrían considerar a largo plazo y que permitirían una revisión más sólida de la estructura del Código. El consejo solicitó al grupo de trabajo explorar estas opciones y emprender la investigación para definir el camino a seguir.   

5. Definición de los Encargadosdel Gobierno Corporativo

El IESBA tomó en cuenta los comentarios recibidos sobre su Borrador de Consulta acerca de un cambio propuesto en relación con la definición del término “encargados del gobierno”. En principio, el IESBA acordó modificar la definición propuesta debido a los comentarios de los replicantes. El IESBA considerará la definición final para aprobación en su junta de Junio 2013, luego de analizarlo con su Grupo Consultivo Asesor (CAG) en la revisión de comentarios que se llevará a cabo en Abril 2013.

6. Asuntos Emergentes y Alcance

El IESBA acordó crear un Grupo de Trabajo sobre Asuntos Emergentes y Alcance con el fin de asesorar el consejo sobre asuntos emergentes y desarrollos internacionales de relevancia para el trabajo del IESBA y para la estrategia de alcance del consejo. El IESBA revisará borradores de términos de referencia para el Grupo de Trabajo en su junta de Junio 2013.

7. Servicios Diferentes al Aseguramiento

El IESBA recibió una breve actualización sobre el enfoque de la Fuerza de Trabajo frente a la recopilación de información para fines de definición del alcance del proyecto. El IESBA considerará la información recopilada y las propuestas de la Fuerza de Trabajo en cuanto al alcance del proyecto en la junta del IESBA en junio de 2013.

8. Próximas Juntas

Las juntas del IESBA y del CAG del IESBA son abiertas al público. El CAG del IESBA realizará su nueva junta en Nueva York, Estados Unidos el 10 de Abril de 2013. La próxima junta del IESBA se llevará a cabo en Nueva York, el 10-12 de junio, 2013.

Para mayor información e inscripción para participar como observador en la junta del IESBA o del CAG del IESBA, favor visitar las páginas Juntas del IESBA o Juntas del CAG del IESBA, respectivamente. 

9. Directriz Reglamentaria de Auditoría de la CE vs. el Código del IESBA: la FEE Compara los Requerimientos de Independencia

En un estudio emitido en Febrero 2013, la Fédération des Experts Comptables Européens (FEE) comparó las provisiones en los marcos de Estados Unidos sobre la independencia del auditor (Directriz Reglamentaria de Auditoría de 2006 y la Recomendación de 2002 sobre la Independencia Reglamentaria de Auditoría en los Estados Unidos) y las provisiones de independencia incluidas en el Código IESBA.

Entre otros asuntos, el estudio reveló que el Código es más sólido en relación con las auditorías de entidades de interés público. En particular, el Código incluye provisiones estrictas para los servicios diferentes a la auditoría y que son incompatibles con la provisión de servicios de auditoría. El estudio reveló igualmente que el Código abarca otros asuntos que podrían ser considerados e incluidos en una ley futura de auditoría en la UE.

10. El IESBA está Contratando

El IESBA busca actualmente un gerente técnico para su equipo de trabajo ubicado en Nueva York. Los candidatos calificados deben contar con experiencia a nivel de gerente o alto gerente en la práctica profesional, en un organismo contable profesional, una oficina de auditoría del sector público, o similar. Para una descripción completa del cargo, las competencias y la experiencia requeridas, referirse a la página Trabajando en la IFAC. Los candidatos calificados pueden enviar su hoja de vida a jobs@ifac.org.

11. Manual IESBA 2013

El IESBA está desarrollando el Manual 2013 del Código de Ética para Contadores Profesionales. Éste contendrá los pronunciamientos finales que abarcan los incumplimientos de las provisiones en el Código y los conflictos de interés, al igual que la definición revisada del término “equipo de auditoría.” El Manual 2013 será publicado en el segundo trimestre de 2013. Para acceder a la edición actual, referirse al Manual IESBA 2012.

12. Congreso Mundial de Contadores 2014 se Llevará a Cabo en Roma; Oportunidades de Patrocinio Disponibles  

El Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (CNDCEC) será anfitrión del siguiente Congreso Mundial de Contadores (WCOA) en Roma, Italia en el 2014. Titulado Visión 2020: Aprendiendo del Pasado, Creando el Futuro, el WCOA 2014 se realizará en Noviembre 10-13 en el  Auditorium Parco della Musica. Más de 4,000 profesionales del mundo entero se reunirán en este evento de la IFAC que se lleva a cabo cada cuatro años. El WCOA 2014 analizará el pasado y explorará la evolución de la profesión contable y mirará hacia el futuro a fin de presentar las innovaciones que moldearán el futuro de la profesión.

El WCOA ofrece igualmente una plataforma a fin que las organizaciones y firmas adapten sus proyectos y visiones a través de diferentes oportunidades de patrocinio. Para mayor información, contactar a info@wcoa2014rome.com o Dimarco@wcoa2014rome.com.

Objective

The objective of the project is to review Part C to ensure that its provisions remain appropriate and are robust.

Thank you for signing up to receive eNews from the International Ethics Standards Board for Accountants (IESBA). This edition of IESBA eNews provides a summary of decisions made at the IESBA’s meeting held March 11-13, 2013, in New York, USA. See the Meeting Page for the meeting highlights, including a podcast summary, and agenda papers.

IN THIS ISSUE:

1. Responding to a Suspected Illegal Act
2. Long Association of Senior Personnel (Including Partner Rotation) with an Audit Client
3. Review of Part C of the Code
4. Structure of the Code
5. Definition of Those Charged with Governance
6. Emerging Issues and Outreach
7. Non-Assurance Services
8. Next Meetings
9. EC Statutory Audit Directive vs. IESBA Code: FEE Compares Independence Requirements
10. IESBA is Hiring
11. 2013 IESBA Handbook
12. World Congress of Accountants 2014 to be Held in Rome; Sponsorship Opportunities Available

1. Responding to a Suspected Illegal Act

The IESBA considered the significant comments received from over 70 respondents on its Exposure Draft (ED), Responding to a Suspected Illegal Act. Topics discussed included: disclosure of a suspected illegal act to an appropriate authority; disclosure to the external auditor; right with an expectation to disclose to an appropriate authority; the “public interest” reporting test and escalation threshold; the requirement to confirm or dispel the suspicion; types of suspected illegal acts to be disclosed; and the interaction of the proposed standard with the International Standards on Auditing (ISAs).

The IESBA will continue its consideration of key issues and future actions at its June 2013 meeting.

2. Long Association of Senior Personnel (Including Partner Rotation) with an Audit Client

The IESBA received an update on the project to review the long association provisions in Section 290 of the Code of Ethics for Professional Accountants (the Code) to ensure that they continue to provide robust and appropriate safeguards against the familiarity and self-interest threats arising from long association with an audit client. Among other matters, the IESBA discussed the approach to research into the partner rotation provisions in major jurisdictions and canvassing the views of stakeholders on the threats associated with long association.

3. Review of Part C of the Code
The IESBA approved a proposal to commence a project to review Part C of the Code addressing professional accountants in business (PAIBs) to ensure that the provisions in that part of the Code are robust and remain appropriate. Phase I of the project will review Sections 300, 320, 330, and 340 of the Code. This phase will, in particular, address pressure by superiors and others to engage in unethical or illegal acts, the responsibility of PAIBs to produce financial reports that are faithful representations of the economics of transactions, and associated matters. Phase II of the project will address Section 350, which is related to facilitation payments and bribes. The IESBA will discuss the project further at its June 2013 meeting.

4. Structure of the Code

The IESBA considered draft terms of reference for, and an initial status report from, the working group formed to advise the Board on ways to improve the readability, understandability, and accessibility of the Code. Among other matters, the IESBA discussed the objectives, scope, and timing of the initiative, as well as the approach to the work. The board agreed that careful thought should be given to distinguishing clearly between options that could be considered on a short term basis and longer term options that could address a more fundamental review of the structure of the Code. The board asked the working group to explore these options and to undertake the research to support the way forward.

5. Definition of Those Charged with Governance

The IESBA considered significant comments received on its ED of a proposed change to the definition of the term “those charged with governance.” The IESBA agreed in principle to amend the proposed definition in the light of respondents’ significant comments. The IESBA will consider the final definition for approval at its June 2013 meeting after consulting with its Consultative Advisory Group (CAG) on the meaningful ED comments in April 2013.

6. Emerging Issues and Outreach

The IESBA agreed to the establishment of an Emerging Issues and Outreach Working Group to advise the board on emerging issues and international developments of relevance to the IESBA’s work, and on the board’s strategy for outreach. The IESBA will consider draft terms of reference for the Working Group at its June 2013 meeting.

7. Non-Assurance Services

The IESBA received a brief update on the Task Force’s approach to information gathering for purposes of scoping out the project. The IESBA will consider the information gathered and the Task Force’s proposals regarding the scope of the project at the June 2013 IESBA meeting.

8. Next Meetings

Meetings of the IESBA and the IESBA CAG are open to the public. The IESBA CAG will next meet in New York, USA on April 10, 2013. The next IESBA meeting will be held in New York, USA, on June 10–12, 2013.

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

9. EC Statutory Audit Directive vs. IESBA Code: FEE Compares Independence Requirements

In a study released in February 2013, the Fédération des Experts Comptables Européens (FEE) compared provisions in the EU frameworks on auditor independence (the 2006 Statutory Audit Directive and the 2002 Recommendation on Statutory Auditor’s Independence in the EU) and the Independence provisions of the IESBA Code.

Among other matters, the study found that the Code is more robust with respect to audits of public interest entities.  In particular, the Code includes strict provisions for those non-audit services that are incompatible with the provision of audit services. The study also found that the Code tackles other matters that may be considered for inclusion in future EU audit legislation.

10. IESBA is Hiring

The IESBA is searching for a technical manager to join its staff team based in New York. Qualified candidates should have experience at the manager or senior manager level in professional practice, a professional accounting body, the office of a public sector auditor, or similar. For a complete job description and required skills and experience, see Working at IFAC. Qualified candidates should send a resume to jobs@ifac.org. 

11. 2013 IESBA Handbook

The IESBA is developing the 2013 Handbook of the Code of Ethics for Professional Accountants. It will contain the final pronouncements addressing breaches of provisions in the Code and conflicts of interest, and the revised definition of “engagement team.” The 2013 Handbook is expected to be released in the second quarter of 2013. For the current edition, see 2012 IESBA Handbook.   

12. World Congress of Accountants 2014 to be Held in Rome; Sponsorship Opportunities Available

The next World Congress of Accountants (WCOA) will be hosted by the Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (CNDCEC) in Rome, Italy in 2014. Themed 2020 Vision: Learning from the Past, Building the Future, the 2014 WCOA will be held November 10-13 at the Auditorium Parco della Musica. More than 4,000 professionals from all over the world will convene at this IFAC event, which is held every four years. WCOA 2014 will look back to explore the evolution of the accountancy profession and forward to showcase the innovations that will shape the future of the profession.

The WCOA also provides a global platform for organizations and firms to share their projects and visions via various sponsorship opportunities. For more information, please contact info@wcoa2014rome.com or Dimarco@wcoa2014rome.com.