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 current environment of rapid technological change continues to impact the way organizations operate, presenting both opportunities and challenges. The accountancy profession is not immune to this disruption and is also in the process of being transformed. This is according to a new thought leadership publication developed by the Chartered Professional Accountants of Canada (CPA Canada), the Institute of Chartered Accountants of Scotland (ICAS), the International Ethics Standards Board for Accountants (IESBA), and the International Federation of Accountants (IFAC). The publication highlights the need for the profession to redefine its value proposition, build new skills for the future and complete a competence paradigm shift in order to remain relevant.
Mindset and Enabling Skills of Professional Accountants – A Competence Paradigm Shiftrecognizes that the accountancy profession has a strong foundation to build on, but an enhanced technological literacy is essential in the information age. A shift in professional accountants’ education and training is needed to reflect emerging opportunities, with upskilling and “evergreen” learning becoming more important than ever. The profession needs to adopt a mindset that continually challenges and leads to an evolution of skills more rapidly than in the past, to harness the opportunities of the changing world and meet the needs of society.
About CPA Canada Chartered Professional Accountants of Canada (CPA Canada) works collaboratively with the provincial, territorial and Bermudian CPA bodies, as it represents the Canadian accounting profession, both nationally and internationally. This collaboration allows the Canadian profession to champion best practices that benefit business and society, as well as prepare its members for an ever-evolving operating environment featuring unprecedented change. Representing more than 220,000 members, CPA Canada is one of the largest national accounting bodies worldwide. cpacanada.ca
About ICAS The Institute of Chartered Accountants of Scotland (ICAS) is the global professional body for Chartered Accountants. We educate, examine and lead, enabling excellence whilst always working for the wider public good. All 23,000 ICAS members have earned our world-class CA designation of Chartered Accountant, the qualification that’s shaped an international business community spanning industries and continents, full of local heroes and corporate leaders. And we continually foster the bonds between our members, so CAs at all stages of their careers can learn from shared experience and connect their ambitions to success. For further information please visit – icas.com.
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).
The International Federation of Accountants (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. Comprised of 180 members and associates in more than 130 countries and jurisdictions, IFAC represents more than 3 million accountants in public practice, education, government service, industry and commerce.
Over four decades, IFAC has represented the global profession and supported the development, adoption, and implementation of international standards that underpin the contributions of today’s global accountancy profession. IFAC has maintained a long-term approach to building and strengthening a global accountancy profession that supports transparent, accountable, and sustainable organizations, financial markets, and economies.
Mindset and Enabling Skills of Professional Accountants – A Competence Paradigm Shift explores how the accountancy profession can stay relevant in a time of unprecedented change
IMA® (Institute of Management Accountants), CalCPA (California Society of Certified Public Accountants), and IFAC (International Federation of Accountants) today released its “Diversifying Global Accounting Talent: Actionable Solutions for Progress” report. As a joint effort, the report assesses the deeply rooted issues inhibiting progress in diversity, equity, and inclusion (DE&I) within the accounting profession and offers actionable solutions to close the gap in DE&I.
The capstone in a series of regional DE&I research studies, the report exposes key factors contributing to the underrepresentation of diverse people in the profession, and particularly at leadership levels, in focus regions (Asia-Pacific, Europe and the Mediterranean, Middle East and North Africa, and North America – the U.S.). Three key catalysts for action toward DE&I progress are presented: the current state of DE&I in accountancy, the responsibility to protect the public interest, and demands for sustainable business information around DE&I.
“The voices of more than 8,000 study participants across the globe issued a call-to-action to the profession’s leaders: a call for recommended solutions and intentional, collective action to affect greater change,” said Jeff Thomson, CMA, CSCA, CAE, IMA president and CEO.
The report generated an inventory of more than 70 actionable DE&I practices, each mapped to relevant United Nations’ Sustainable Development Goals, and reflects input from dozens of leaders representing millions of accountants who can implement those practices. It offers recommended steps needed to remedy the lack of equity and inclusion as a path to improving diversity. While expanded efforts have energized DE&I, there is often a disconnect between perceived progress among leaders and progress truly felt and realized by the staff or profession at large.
“By collaborating through shared resources and efforts, leaders can learn from one another and yield long-lasting solutions,” said Denise LeDuc Froemming, CPA, CAE, president and CEO at CalCPA. “So, we are humbled and honored to be accompanied by more than 60 professional accountancy organizations who join us as DE&I advocates for progress and commit to collective action.”
The authors classified their actionable practices into two main categories: attract diverse talent and retain and promote the diverse talent. Leaders must welcome and value diverse employees to sustain the accounting workforce in the years to come.
Kevin Dancey, CEO at IFAC, said: “Professional accountants are bound by ethical commitments, which should extend into DE&I efforts. The solutions recommended in this report can and should be leveraged by professional accountants and leaders across the profession, to move our workplaces around the world toward a culture of belonging and fulfill our obligation to protect the public interest.”
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 180 members and associates in 135 countries and jurisdictions, representing more than 3 million accountants in public practice, education, government service, industry, and commerce.
About IMA® (Institute of Management Accountants)
IMA® is one of the largest and most respected associations focused exclusively on advancing the management accounting profession. Globally, IMA supports the profession through research, the CMA® (Certified Management Accountant) and CSCA® (Certified in Strategy and Competitive Analysis) programs, continuing education, networking, and advocacy of the highest ethical business practices. Twice named Professional Body of the Year by The Accountant/International Accounting Bulletin, IMA has a global network of about 140,000 members in 150 countries and 350 professional and student chapters. Headquartered in Montvale, N.J., USA, IMA provides localized services through its four global regions: The Americas, Asia/Pacific, Europe and Middle East/India. For more information about IMA, please visit www.imanet.org.
About CalCPA CalCPA traces its heritage to 1903 when the California State Society of Certified Public Accountants was organized. In 1909, it merged with two other state CPA associations to form CalCPA. CalCPA serves more than 43,000 members in public practice, private industry, students, academia and government, and has 14 chapters across California. CalCPA also offers more than 1,400 live courses, conferences, webcasts and on-demand self-study courses annually.
Report offers solutions to closing the diversity gap
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.
“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.
Expanded Public Interest Entity (PIE) Definition Complements Recently Strengthened International Independence Standards (IIS) in Relation to Non-Assurance Services and Fees Paid by Audit Clients
The IESBA’s technology exposure draft represents the IESBA’s firm response to the transformative effects of technology by enhancing the Code’s robustness and expanding its relevance in an environment being reshaped by rapid technological advancements. The proposed amendments will guide the ethical mindset and behavior of professional accountants in business and in public practice as they deal with changes brought by technology in their work processes and the content of the services they provide. The proposed revisions build on the role and mindset changes that became effective last December, and the revised Non-Assurance Services (NAS) provisions that will become effective in December 2022.
The early-April event was attended by participants in over 76 jurisdictions globally.
Together with ICAEW, The International Federation of Accountants (IFAC) today released a new installment in its Anti-Money Laundering: The Basics educational series: Installment Eight: Crime Trends.
The publication is part of a series helping accountants enhance their understanding of how money laundering works, the risks they face, and what they can do to mitigate these risks and make a positive contribution to the public interest. Installment eight looks at recent crime trends like human trafficking and terrorist financing and the role money laundering plays.
Anti-Money Laundering: The Basics is user-friendly, easily accessible, and will be a resource for Small and Medium Practices (SMPs) and accountants less familiar with AML, while also providing guidance for those looking for a quick refresher or reference.
Anti-Money Laundering: The Basics is featured on both the IFAC (landing page) and ICAEW websites and available for download for free. To be globally relevant, the series uses the risk-based approach of the Financial Action Task Force (FATF) – the global money laundering and terrorist financing watchdog -- as a starting point.
For more information about IFAC, visit www.ifac.org.
April 19, 2022, from 10:00-11:30 am Greenwich Mean Time.
Each webinar will include an opportunity for stakeholders to participate in a questions and answers session. The first webinar will be 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. The second webinar will be presented by Ms. Caroline Lee and Mr. Andrew Pinkney, IESBA Technical Advisor and member of the ET-GA Task Force. Both webinars will be held on Zoom.
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.
The webinars will be held in English and available on YouTube.
The Technology Working Group of the International Ethics Standards Board for Accountants (IESBA) is pleased to announce the members of the recently established IESBA Technology Experts Group (TEG).
Experienced in using and implementing technology, TEG members will act as a “sounding board” to the IESBA’s Technology Working Group, providing advice and other input to help inform the Working Group’s fact-finding work and deliverables.
The TEG will be chaired by IESBA Member and Chair of the Technology Working Group, Mr. Brian Friedrich. TEG members are:
Jason Bradley, Financial Reporting Council, United Kingdom
Clinton Firth, Ernst & Young, Middle East and North Africa
William Gee, PricewaterhouseCoopers, Mainland China and Hong Kong
Loreal Jiles, Institute of Management Accountants, North America
Mario Malouin, Université du Québec en Outaouais, North America
The TEG is expected to hold its first meeting before the IESBA’s June 2022 Board Meeting. The TEG will receive technical staff support from Jon Reid, Senior Technical Manager at the Australian Accounting Professional & Ethical Standards Board (APESB), a member of the IESBA-National Standard Setters liaison group.
About the IESBA’s Technology Initiatives
The IESBA is progressing multiple technology workstreams in a coordinated manner. This includes:
The development of technology-related revisions to the Code so that it remains relevant and fit for purpose as technology advances (the Technology project). On February 18, 2022, the IESBA released its Exposure Draft: Proposed Technology-related Revisions to the Codewith a comment period until June 20, 2022.
Fact finding to identify and assess the potential impact of technology on the behavior of professional accountants and the applicability of the Code in relation to ethics and independence.
The development of technology-related thought leadership and other materials in relation to ethics and independence for professional accountants and the wider stakeholder community.
Additional information about the IESBA’s technology workstreams is available on the IESBA’s website.
This one-hour webinar will also include an opportunity for stakeholders to participate in a questions and answers session with the presenters, Mr. Richard Huesken, IESBA member and Chair of the Technology Task Force, and Mr. Gregory Driscoll, IESBA technical advisor and member of the Technology Task Force. It will be held on Zoom.
The IESBA’s technology exposure draft represents the IESBA’s firm response to the transformative effects of technology by enhancing the Code’s robustness and expanding its relevance in an environment being reshaped by rapid technological advancements. The proposed amendments will guide the ethical mindset and behavior of professional accountants in business and in public practice as they deal with changes brought by technology in their work processes and the content of the services they provide. The proposed revisions build on the role and mindset changes that became effective last December, and the revised Non-Assurance Services (NAS) provisions that will become effective in December 2022.
The webinars will be held in English and available on YouTube following the session.
