Today IFAC completed its inaugural series—Exploring the IESBA Code—a unique, educational resource developed in collaboration with the staff of the International Ethics Standards Board for Accountants (IESBA). Launched in November 2019, each installment of the series highlights important concepts and topics in the International Code of Ethics for Professional Accountants (including International Independence Standards).

The final installment, released today, explains the “building blocks” structure of the Code and its interconnected nature. This installment is intended to help readers better understand how to use and navigate the Code so that they can quickly identify and access the ethics and independence standards and guidance relevant to them. Other topics covered in the series include: the fundamental principles, the conceptual framework, auditor independence, conflicts of interest, inducements, non-compliance with laws and regulations (NOCLAR), pressure, and the role and mindset expected of the professional accountant with a focus on bias.

“The Exploring the IESBA Code series is a very useful tool to complement the IESBA eCode,” said Dr. Stavros Thomadakis, IESBA Chairman. “Each installment provides a summary of important aspects of the Code with cues on how to read and apply its authoritative text. This final installment spotlights the purpose of the Code, how it is structured, and how it should be used—by accountants in business (PAIBs) and public practice (PAPPs), including auditors. The successful completion of this initiative demonstrates once again how IESBA’s and IFAC’s  partnership is valuable in supporting the global adoption and implementation of the Code.”

IFAC’s CEO, Kevin Dancey, said “The ethical foundation of the accountancy profession is one of its most important features. The Exploring the IESBA Code series demonstrates IFAC’s commitment to this ethical foundation and our role in supporting the important work of IESBA, as well as the International Auditing and Assurance Standards Board (IAASB) and International Public Sector Accounting Standards Board (IPSASB). I encourage our members, professional accountancy organizations and national standard setters around the world to leverage this new resource—to help raise awareness of the Code and to help professional accountants uphold their public interest responsibility.” 

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 more than 175 members and associates in more than 130 countries and jurisdictions, representing almost 3 million accountants in public practice, education, government service, industry, and commerce.

About IESBA

The International Ethics Standards Board for Accountants (IESBA) is an independent global standard-setting board. The IESBA’s mission is to serve the public interest by setting ethics standards, including auditor independence requirements, which seek to raise the bar for ethical conduct and practice for all professional accountants through a robust, globally operable International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code).

Today, the International Ethics Standards Board for Accountants (IESBA) announced it is holding two global webinars focused on its recently released Exposure Draft: Proposed Revisions to the Definitions of Listed Entity and Public Interest Entity in the Code (PIE ED).

Please click below to register and join us for one of the 60-minute webinars (both will cover the same information and are being offered to accommodate different time zones).

• Thursday, March 25, 2021, 4:00 AM - 5:00 AM EDT
• Monday, March 29, 2021 9:00 AM - 10:00 AM EDT

During the webinars, the PIE Task Force Chair, Mr. Mike Ashley, will explain the IESBA’s key proposals in the ED, including:

• The introduction of an overarching objective for additional independence requirements for audits of PIEs
• Approach to revising the PIE definition and the introduction of a new term “publicly traded entity” to replace “listed entity”
• Anticipated role of regulators, national standard setters and other relevant local bodies to refine the PIE definition as part of the adoption process
• Increased role of firms

Don’t miss out on this unique opportunity to engage with representatives of the IESBA and learn more about these important proposals which will affect the scope of application of the IESBA’s International Independence Standards.

The IESBA welcomes comments on the PIE ED 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 PIE ED is May 3, 2021. 

If you have any questions, please email Geoff Kwan at GeoffKwan@ethicsboard.org.

About IESBA

The International Ethics Standards Board for Accountants (IESBA) is an independent global standard-setting board. The IESBA’s mission is to serve the public interest by setting ethics standards, including auditor independence requirements, which seek to raise the bar for ethical conduct and practice for all professional accountants through a robust, globally operable International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code).

Watch the webinar: 

As an increasing number of businesses around the world implement integrated reporting as a route to long-term value creation and sustainable development, the demand for assurance services on such reports is expected to rise accordingly. To help meet this demand, and to increase confidence in integrated reporting, the International Federation of Accountants (IFAC) and the International Integrated Reporting Council (IIRC) are launching a new joint initiative, Accelerating Integrated Reporting Assurance in the Public Interest (“the Initiative”).

The Initiative recognizes that new thinking is required to determine what comprises integrated report assurance and how to best deliver it, given integrated reporting’s broad and forward-looking focus on value creation. The Initiative, which will be rolled out in installments, is designed to heighten awareness of key issues, drive constructive conversation with and among key stakeholders, and encourage providers and users of assurance services in particular to lend their voices to the effort.

The first installment is being released today and sets out what integrated reporting assurance involves for organizations, auditors, and others. This installment also addresses the difference between the two types of assurance - limited and reasonable - and what is required of auditors and organizations to strive for reasonable integrated reporting assurance.

Feedback on the Initiative and the first installment can be sent to stathisgould@ifac.org. All comments are welcome, especially those that address:

• perceived or actual opportunities and challenges for progressing integrated reporting assurance
• areas in which additional thought leadership and guidance would be useful for organizations, auditors and assurance providers.

Commenting on the initiative, Charles Tilley, Chief Executive Officer, IIRC said, “We believe the move toward assurance of integrated reports, particularly the move from limited to reasonable assurance, should lead to improvements in the quality of integrated reports and underlying business practices, and enable investors and other stakeholders to have more confidence in the information reported about the business and its resilience.”

Tjeerd Krumpelman, Global Head of Advisory, Reporting & Engagement, ABN AMRO N.V. said “We decided a few years ago to obtain cover-to-cover independent assurance, based on the <IR> Framework, from our financial statements auditor, EY, on our 2017 Integrated Report. We were a groundbreaker in this regard, and encourage all other integrated reporters to do the same. We believe this pathway has not only enhanced the credibility of our report and provided stakeholders with increased confidence, but we also received valuable reporting and process improvement recommendations. Our next step is to move from limited to reasonable assurance for parts of our integrated report, and to obtain assurance on other non-financial disclosures, such as our Human Rights report, because it makes good business sense.”

Kevin Dancey, Chief Executive Officer, IFAC, said, “Integrated reporting assurance, and indeed providing assurance on all non-financial (including sustainability) information, is a critical element in the future role of accountants, requiring them to apply their professional expertise to assurance engagements that enhance the credibility of corporate reporting. Practice needs to develop quickly in this immature part of the reporting and assurance world, particularly to provide confidence in narrative and forward-looking information. Professional accountants, as preparers and assurance providers, are uniquely qualified to help lead the way in this important area.”

About IFAC
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. IFAC is comprised of more than 175 members and associates in more than 130 countries and jurisdictions, representing more than 3 million accountants in public practice, education, government service, industry, and commerce.

About the IIRC
The International Integrated Reporting Council (IIRC) is a global coalition of regulators, investors, companies, standard setters, the accounting profession, academia and NGOs. The coalition promotes communication about value creation as the next step in the evolution of corporate reporting. The IIRC’s vision is to align capital allocation and corporate behaviour to wider goals of financial stability and sustainable development through the cycle of integrated reporting and thinking. Visit: www.integratedreporting.org

The global search for an individual to lead the International Ethics Standards Board for Accountants (IESBA) has begun and applications from qualified candidates around the globe are being accepted.

An essential element of the IESBA Chair’s role is to ensure that the activities of the IESBA maintain a public interest focus while developing high-quality ethics, including independence, standards. The Chair brings a strategic mindset to the development and implementation of Board objectives and fulfills several interrelated roles, serving as leader, spokesperson and stakeholder liaison. The incumbent will facilitate the consultative processes that underpin the board’s credibility and activities. He or she will also develop and maintain effective relationships with international oversight authorities and regulatory bodies, national standard setters, investor and corporate governance communities, preparers and other professional accountants in business, accounting firms, professional accountancy bodies, international policy makers and other key stakeholders.

The IESBA Chair must have significant and senior experience and will be well recognized within the professional and regulatory communities. He or she has effective leadership, diplomacy, communication and strategic skills; demonstrated professional competency; and a strong commitment to the IESBA’s mission to protect the public interest.

In line with recommendations of the Monitoring Group detailed in the Strengthening The International Audit And Ethics Standard-Setting System, the IESBA Chair will lead the board through the transition while maintaining the continued effective execution of the IESBA Strategy and Work Plan 2019 - 2023.

The IESBA Chair is a full-time executive position. The Chair is appointed for an initial three-year term, commencing January 1, 2022 and could be re-appointed for a total tenure of nine years. Relocation is not required for this role. However, candidates are expected to have a robust plan for how they would lead the IESBA and staff from a remote location. The role requires a commitment to significant international travel.

A complete job description, along with application instructions, is available online. Applications are due April 30, 2021.

This global search is being conducted by the Interim Nominating Committee, which was established by the Monitoring Group in February 2021 to conduct the selection process for the next IESBA Chair. More information on the Committee is available online.

The International Ethics Standards Board for Accountants (IESBA) applauds the announcement by The Monitoring Group (MG), the International Federation of Accountants (IFAC), and the Public Interest Oversight Board (PIOB) of the establishment of an Interim Nominating Committee to select the next Chair of the IESBA.

We look forward to the official call for nominations and the formal selection process to find a successor for Dr. Stavros Thomadakis, whose term will be ending at the end of this year.

The International Ethics Standards Board for Accountants (IESBA) today released for public comment the Exposure Draft, Proposed Revisions to the Definitions of Listed Entity and Public Interest Entity in the Code.

The proposed revisions broaden the definition of a public interest entity (PIE) to include more categories of entities, given the level of public interest in their financial condition, for the purposes of additional independence requirements to enhance confidence in their audits.

“The PIE concept is central to the International Independence Standards as it determines whether the auditor of an entity should comply with additional independence requirements,” said IESBA Chairman Dr. Stavros Thomadakis. “As economies around the world evolve, capturing the appropriate types of entities as PIEs and doing so in a globally operable way is a matter of public interest. I am grateful for the good input provided by the IAASB, under our established arrangements for close coordination.”

Among other matters, the proposed revisions:

• Introduce an overarching objective for additional requirements to enhance confidence in the audit of financial statements of PIEs.
• Provide guidance on factors to consider when determining the level of public interest in an entity.
• Broaden the definition of PIE to additional categories of entities.
• Replace the term “listed entity” with the term “publicly traded entity” and redefine that PIE category.
• Introduce new requirements for firms to determine if additional entities should be treated as PIEs for independence purposes and to publicly disclose if an audit client was treated as a PIE.
• Recognize and encourage local regulators to refine PIE categories in regard to national conditions.

In the holistic approach adopted, the specifications for the PIE categories are set at a high level given the wide diversity in national PIE definitions which necessarily reflect local circumstances. Integral to this approach is the role the IESBA expects regulators, national standard setters or other relevant local bodies to play in refining these high-level categories so that the right entities in the local context are captured. To assist in understanding this prospective role, the IESBA will undertake outreach and education activities over the coming months, including guidance material in February and webinars in March.

How to Comment

The IESBA invites all stakeholders to comment on the Exposure Draft by visiting the IESBA website. Comments are requested by May 3, 2021.

As part of this public consultation, the IAASB invites stakeholders to comment on aspects of the Exposure Draft for its consideration of the possible development of its International Standards.

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).

Earlier today, the Staff of UK Financial Reporting Council (FRC) and the International Ethics Standards Board for Accountants (IESBA) jointly released the publication, Ethical and Auditing Implications Arising from Government-Backed COVID-19 Business Support Schemes.

This staff publication highlights ethical and auditing implications arising from government-backed business support programs which have been utilized at unprecedented levels during the COVID-19 pandemic. The guidance sets out important ethical considerations for professional accountants who are called upon to assist their employing organizations or clients in applying for and using COVID-19-related funding or financial support. The document includes guidance for those who prepare related financial information and disclosures, as well as for those who independently audit or provide assurance services regarding such information.

The publication was developed by the Staff of UK FRC under the auspices of a Working Group formed by the IESBA and national ethics standard setters (NSS) from Australia, Canada, China, South Africa, the UK and the US. Chaired by Mr. Richard Fleck, former IESBA Deputy Chair, the Working Group’s mandate is to develop implementation support resources to assist accountants effectively apply the International Code of Ethics for Professional Accountants (including International Independence Standards) when facing circumstances created by the COVID-19 pandemic. The publication benefited from input from IESBA Staff.

The publication can be found on the IESBA COVID-19 resource page.

About the IESBA-NSS Working Group

The Working Group organizations comprise: Accounting Professional & Ethical Standards Board (Australia); Chartered Professional Accountants of Canada; the Chinese Institute of Certified Public Accountants; the Independent Regulatory Board for Auditors (South Africa); the UK Financial Reporting Council; and the American Institute of Certified Public Accountants (US).

About UK Financial Reporting Council

The UK Financial Reporting Council regulates auditors, accountants and actuaries, and it sets the UK’s Corporate Governance and Stewardship Codes. The FRC promotes transparency and integrity in business. Its work is aimed at investors and others who rely on company reports, audit and high-quality risk management.

About IESBA

The International Ethics Standards Board for Accountants (IESBA) is an independent global standard-setting board. The IESBA’s mission is to serve the public interest by setting ethics standards, including auditor independence requirements, which seek to raise the bar for ethical conduct and practice for all professional accountants through a robust, globally operable International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code).

Together with ICAEW, The International Federation of Accountants (IFAC) today released the fourth installment in its Anti-Money Laundering: The Basics educational series: Installment 4: Asset Transfers.  

The publication is part of a 6-month short 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 four examines asset transfers, one of the primary ways in which criminals layer or integrate the proceeds of crime into the legitimate economy.

Anti-Money Laundering: The Basics is featured on both the IFAC and ICAEW websites and available for download for free. IFAC is featuring the series on a new landing page alongside other relevant information on anti-money laundering (AML).

To be globally relevant, the Anti-Money Laundering: The Basics  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.

For more information about ICAEW, visit https://www.icaew.com/.

The International Ethics Standards Board for Accountants (IESBA) today released revisions to the International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code) addressing the objectivity of an engagement quality reviewer (EQR) and other appropriate reviewers. This project dovetailed with the International Auditing and Assurance Standards Board’s (IAASB’s) development of International Standard on Quality Management (ISQM) 2, Engagement Quality Reviews, which was finalized in December 2020.

The revisions provide guidance that supports ISQM 2 in addressing the eligibility of an individual to serve in an EQR role, focusing on the critical attribute of objectivity. Among other matters, the guidance:

• Elaborates on the need to identify, evaluate and address threats to compliance with the fundamental principle of objectivity that might arise in the appointment of an individual as an EQR for a given engagement;
• Explicitly refers to and supports the requirement in ISQM 2 for a firm to establish, as a condition for eligibility, a cooling-off period of two years before an engagement partner can assume the EQR role on the same engagement; and
• Emphasizes that this cooling-off requirement in ISQM 2 serves the dual objective of supporting compliance with the fundamental principle of objectivity and the high quality of engagements.

The guidance may also apply in situations where, as a safeguard to address identified threats to compliance with the fundamental ethics principles, an individual is appointed as an appropriate reviewer for work performed.

“It is in the public interest that individuals trusted to serve as engagement quality reviewers act with unquestioned objectivity, given the nature and importance of that role,” said IESBA Chairman Dr. Stavros Thomadakis. “This new guidance is intended to reinforce the guardrails around this important function. I commend the extensive coordination efforts between the IESBA and IAASB in finalizing this guidance, and acknowledge the Public Interest Oversight Board’s useful advice on this project.”

The enhanced guidance will become effective December 2022. 

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).

The International Public Sector Accounting Standards Board^® (IPSASB^®) has today released for comment Exposure Draft (ED) 75, Leases and Request for Information, Concessionary Leases and Other Arrangements Similar to Leases. Stakeholder comments on ED 75 and Request for Information sought by May 17, 2021.

ED 75 proposes an IFRS 16, Leases aligned model for lease accounting in the public sector. For lessees, as with the IPSASB’s previous proposals in ED 64, ED 75 proposes a right-of-use model that will replace the risks and rewards incidental to ownership model in International Public Sector Accounting Standard^® (IPSAS^®) 13, Leases. For lessors, ED 75 proposes to substantially carry forward the risks and rewards incidental to ownership model in IPSAS 13 in response to ED 64 comments and practical IFRS 16 implementation experience.

Issued alongside ED 75, the Request for Information will provide the IPSASB with further information on the issues that need to be considered in accounting for concessionary leases and other arrangements similar to leases that are quite common in the public sector. This will then allow the IPSASB to determine the nature and extent of the additional guidance required in phase two of the Leases project.

“In light of the responses to ED 64, Leases, and emerging practical experience with implementing IFRS 16, the IPSASB decided to revise its overall approach to the Leases project,” said IPSASB Chair Ian Carruthers. “The proposals in ED 75 will improve the transparency of lease accounting in the public sector, while allowing it to benefit from the private sector experience in implementing IFRS 16. The Request for Information will provide the IPSASB with further background on the more complex lease-related transactions common in the public sector, enabling the Board to decide what further guidance is required.”

How to Comment
To access the Exposure Draft, its summary At-a-Glance document, and the Request for Information or to submit a comment, visit the IPSASB website, www.ipsasb.org. Comments are requested by May 17, 2021. The IPSASB encourages IFAC members, associates, and Network Partners to promote the availability of this Consultation Paper to their members and employees.

About the IPSASB
The International Public Sector Accounting Standards Board (IPSASB) works to strengthen public financial management globally through developing and maintaining accrual-based International Public Sector Accounting Standards® (IPSAS®) and other high-quality financial reporting guidance for use by governments and other public sector entities. It also raises awareness of IPSAS and the benefits of accrual adoption. The Board receives support from the Asian Development Bank, the Chartered Professional Accountants of Canada, the New Zealand External Reporting Board, and the governments of Canada and New Zealand. The structures and processes that support the operations of the IPSASB are facilitated by the International Federation of Accountants (IFAC). For copyright, trademark, and permissions information, please go to permissions or contact permissions@ifac.org.

About the Public Interest Committee
The governance and standard-setting activities of the IPSASB are overseen by the Public Interest Committee (PIC), to ensure that they follow due process and reflect the public interest. The PIC is comprised of individuals with expertise in public sector or financial reporting, and professional engagement in organizations that have an interest in promoting high-quality and internationally comparable financial information.