As the global accountancy profession began adapting to the COVID-19 pandemic and its consequences, IFAC (the International Federation of Accountants) convened a series of roundtable discussions to understand the implications of the pandemic for professional accountants and leaders, and how their experiences will affect the future of accountancy and accountancy skills.

Today, IFAC published a summary of these findings, Accountancy Skills Evolution: Impact of COVID-19 & the Path Forward. This whitepaper outlines the key themes our stakeholders shared, including accelerated ways of working, impact of technology, practices that align to new societal demands, and the right balance of skills, which collectively illustrate a roadmap for the professional accountant.

The roundtable discussions and emerging themes also influenced the structure and content of the upcoming virtual global summit, The Anticipatory Accountant: Global Trends Transforming Learning & Development. The summit, which features world-renowned futurist Daniel Burrus and special guest Tom Hood, continues these conversations and focuses on three broad themes: technology, the environment, and society.

Together with ICAEW, The International Federation of Accountants (IFAC) today released the second installment in its Anti-Money Laundering: The Basics educational series: Installment 2: A Risk-Based Approach.  

The publication is part of a 6-month short series helping professional 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.

The first installment in the series provided a general overview of AML, including a definition of money laundering and an analysis of key concepts professional accountants must understand.  

The installment series, with its focus on accessibility and ease of use, 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 will be featured on both the IFAC 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.

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

Earlier today, the IESBA’s Technology Task Force launched two online surveys with questions seeking stakeholder feedback to inform its consideration of issues related to two key recommendations in the February 2020 Phase 1 report of its Technology work stream, Technology Working Group Phase 1 Final Report. The topics addressed by these two recommendations are:

• Technology and complexity in the professional environment; and
• The impact of technology on auditor independence.

Stakeholder responses to the surveys will help guide the IESBA’s consideration of next steps in relation to those two topics at its December 2020 Board meeting.

The IESBA is seeking views and input from all categories of stakeholders, including investors and other users of financial statements, the corporate governance community, the regulatory and audit oversight community, preparers, firms, national standard setters, professional accountancy organizations, academics and others. Don’t miss this unique opportunity to contribute to international standard setting.

How to Participate in the Survey

Click on the links below to respond to each survey by November 10, 2020.

1. Technology and complexity in the professional environment; and
2. Impact of Technology on Auditor Independence.

If you are experiencing difficulty in submitting your completed questionnaire online, please contact KamLeung@ethicsboard.org.

Alternatively, you may also complete the PDF versions of the survey by November 10, 2020 and e-mail them to KamLeung@ethicsboard.org. Click below to access these versions.

• PDF versions of technology surveys

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.

Earlier today, the Staff of the American Institute of Certified Public Accountants (AICPA), the International Ethics Standards Board for Accountants (IESBA) and the International Auditing and Assurance Standards Board (IAASB) jointly released the publication, Using Specialists in the COVID-19 Environment: Including Considerations for Involving Specialists in Audits of Financial Statements.

The publication provides guidance to assist professional accountants in business and in public practice determine when there might be a need to use the services of a specialist to assist in performing specific tasks and other professional activities within their employing organizations, and in serving their clients in the COVID-19 environment. The publication also highlights relevant ethical considerations for accountants when thinking about using a specialist, as well as circumstances that indicate a need for a specialist during an audit of financial statements.

The publication was developed by the Staff of the AICPA 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, 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 and IAASB Staff.

The publication can be found on the IESBA’s and IAASB’s COVID-19 resource pages. The Working Group has committed to developing additional COVID-19 guidance in the coming weeks.

About the IESBA-NSS Working Group

The Working Group organizations comprise: APESB (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 AICPA

The American Institute of Certified Public Accountants (AICPA) is the world’s largest member association representing the accounting profession. The AICPA’s history of serving the public interest stretches back to 1887. Today, you’ll find 431,000+ members in 130 countries and territories, representing many areas of practice, including business and industry, public practice, government, education and consulting.

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).

About IAASB

The International Auditing and Assurance Standards Board (IAASB) develops auditing and assurance standards and guidance for use by all professional accountants under a shared standard-setting process involving the Public Interest Oversight Board, which oversees the activities of the IAASB, and the IAASB Consultative Advisory Group, which provides public interest input into the development of the standards and guidance.

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) to better promote the role and mindset expected of all professional accountants.

The revisions explicitly recognize that the accountancy profession is entrusted with public confidence in the wide-ranging roles it plays in society and that such confidence is based on the skills and values it brings to its professional activities. Importantly, they reaffirm the profession’s responsibility to act in the public interest and the fundamental role of the Code in meeting that responsibility.

Among other matters, the revisions:

• Reinforce aspects of the principles of integrity, objectivity and professional behavior;
• Raise behavioral expectations of all professional accountants through requiring them to have an inquiring mind as they undertake their professional activities;
• Emphasize the importance of accountants being aware of the potential influence of bias in their judgments and decisions; and
• Highlight the supportive role the right organizational culture can play in promoting ethical conduct and business.

“The ethical principles and behavioral expectations embodied in the Code are the bedrock of the accountancy profession,” said Dr. Stavros Thomadakis, IESBA Chairman. “The profession is a major player in the global financial ecosystem and an indispensable facilitator of economic growth. The enhancements we have made to the Code speak to the importance of protecting and strengthening public trust in it across its varied roles and activities.”

Throughout this project, the IESBA has benefited from coordination with the International Auditing and Assurance Standards Board (IAASB) and the former International Accounting Education Standards Board (IAESB) on issues common to their standards, and especially in developing the provisions addressing the mindset expected of professional accountants.

The “role and mindset” revisions will become effective on December 31, 2021.

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 the Accounting Professional & Ethical Standards Board (APESB) and the International Ethics Standards Board for Accountants (IESBA) released a new publication, Applying the Code’s Conceptual Framework in COVID-19 Circumstances: Scenarios in Taxation and Valuation Services, providing guidance to professional accountants in applying  the conceptual framework in the International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code) during certain circumstances brought on by the COVID-19 pandemic. The publication uses four hypothetical scenarios covering services or activities relating to taxation and valuation services. Two scenarios include guidance for professional accountants in public practice, and two scenarios are focused on professional accountants in business.  

The publication was developed by the Staff of the APESB as one of the initiatives 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. The Group’s mandate is to develop implementation support resources to assist accountants effectively apply the Code when facing circumstances created by the COVID-19 pandemic.

The Group is chaired by the IESBA Deputy Chair, Mr. Richard Fleck, with support from IESBA and NSS staff. Working Group organizations comprise: APESB (Australia); Chartered Professional Accountants 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).

The publication can be found on the IESBA’s COVID-19 resource page which serves as the landing page on the IESBA’s website for topics related to COVID-19. The Working Group has committed to developing additional COVID-19 guidance in the coming weeks.

About APESB

Accounting Professional & Ethical Standards Board (APESB) was formed in 2006 as an independent national standards setter in Australia with the primary objective of developing professional and ethical standards in the public interest for the members of the three Australian Professional Accounting Bodies, namely Chartered Accountants Australia and New Zealand, CPA Australia and the Institute of Public Accountants. The three Professional Accounting Bodies are the members of APESB.

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).

The COVID-19 pandemic continues to disrupt markets, businesses, and organizations. This disruption has spawned an environment of uncertainty and unpredictability that may create risks that are new, or intensified, in the circumstances.

To serve the public interest, the IAASB has sought to assist, adapt, and collaborate with its many stakeholders. Now is no time to relax the commitment to the public interest. Our goal is to support the important role auditors must play in sustaining trust in financial and other external reporting. The IAASB has been closely working with its national standard-setting partners and the International Ethics Standards Board for Accountants (IESBA) to coordinate efforts and has been in regular discussion with regulatory authorities.

The purpose of this note is to update stakeholders on the outputs of our “assist” activities, although our efforts have also focused on adapting our work plan and ways of working, as well as targeted coordination with many of our stakeholders. 

A core element of our COVID-19 response has been the development of a series of specific COVID-19 audit related resources to help our stakeholders, and the larger accountancy community, navigate the application of the International Standards on Auditing (ISAs) in the current circumstances.

Since March, the IAASB has published six “Staff Audit Practice Alerts” which address the following topics:

• Areas of Focus in an Evolving Audit Environment Due to the Impact of COVID-19

Highlights some of the broader areas that may need to be further considered in designing and performing audit procedures to obtain sufficient appropriate audit evidence, and to report accordingly.

• Going Concern

Highlights key areas of focus when undertaking procedures relating to, and concluding on, the appropriateness of management’s use of the going concern basis of accounting in accordance with the ISAs, as well as reporting requirements where there are material uncertainties related to the entity’s ability to continue as a going concern.

• Subsequent Events

Highlights key areas of focus when undertaking procedures relating to subsequent events in accordance with the ISAs, i.e., matters related to events occurring between the date of the financial statements and the date of the auditor’s report and the effect, if any, of such on the entity’s financial statements.

• Auditor Reporting

Highlights key areas of focus relevant to auditor reporting in accordance with the ISAs, including modifications to the auditor’s opinion, the ‘material uncertainty related to going concern’-section, key audit matters, emphasis of matter and other paragraphs, as well as interim review reports (in accordance with International Standard on Review Engagements (ISRE) 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity).

• Auditing Accounting Estimates

Highlights key areas of focus when undertaking audit procedures relating to accounting estimates and related disclosures in accordance with the ISAs, in particular considering the significant impact of estimation uncertainty and subjectivity in the current environment on accounting estimates.

• Review Engagements on Interim Financial Information

Highlights key matters for consideration when undertaking a review of interim financial information in accordance with ISRE 2410, including the auditor’s work effort and reporting considerations. 

To allow for easier accessibility for the broader audience, the IAASB has established a separate COVID-19 Resource Page, as part of the IAASB website. This page not only houses the topic-specific Staff Audit Practice Alerts, but also provides several other areas of interest, including thought leadership from the IAASB, webinars on related topics, and links to other web-based COVID-19 resources. We encourage all direct users of our standards, as well as the broader financial community, to utilize these resources. 

The IAASB will continue to adapt the way we work for the current evolving environment and provide assistance to those who use our standards. To learn more, and be kept aware of the latest developments, join our mailing list and follow us on Twitter and LinkedIn, as we will announce updates to our response on all three channels. 

Yours sincerely,

Tom Seidenstein
Chair, IAASB

The International Federation of Accountants (IFAC) today released the latest in its Exploring the IESBA Code educational series: Installment 8: Responding to Non-compliance with Laws and Regulations (NOCLAR) [for PAIBs].

The publication is part of a 12-month short series to help promote awareness of the provisions in the International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code). Each installment focuses on a specific aspect of the Code using real-world situations in a manner that is relatable and practical. This NOCLAR installment is part 1 of 2 and is focused on explaining the actions that accountants in business, including senior professional such are directors, and officers are expected to take when they become aware of, or suspect a NOCLAR within their employing organizations. Part 2 will focus highlighting provisions that apply to auditors and other accountants in public practice in client service. Previous installments highlighted the Code’s five fundamental principles of ethics and conceptual framework, as well as more topic-specific requirements, such as independence and conflicts of interest.

“The Exploring the IESBA Code series is the result of a strong collaborative effort between the International Federation of Accountants and the International Ethics Standards Board for Accountants (IESBA),” said Kevin Dancey, CEO of IFAC. “International standards are the bedrock on which our profession is built, and IFAC is committed to developing resources that raise awareness and encourage the adoption and implementation of such standards.”

Dancey continued, “We launched the Exploring the IESBA Code initiative last November to support the work of IESBA and highlight the substantively revised and restructured Code, including the digital eCode. We are pleased to see this material being used by professional accountancy organizations around the world to promulgate guidance on ethics and independence, and we will continue to support this important work.”

The Exploring the IESBA Code is published by IFAC and does not form part of the Code. It is non-authoritative and is not a substitute for reading the Code.  Click here to access this and future installments.

For more information about IFAC, visit www.ifac.org

For more information about the IESBA and the Code, visit www.ethicsboard.org

The International Auditing and Assurance Standard Board (IAASB) invites interested stakeholders to complete an online survey sharing their experience with, and providing feedback relating to, the Auditor Reporting Standards that were issued in 2015. The Survey also asks for input on your experiences with ISA 720 (Revised), The Auditor’s Responsibilities relating to Other Information.

The Auditor Reporting Standards are aimed at enhancing the communicative value and relevance of the auditor’s report. The standards are effective for audits of financial statements for periods ending on or after December 15, 2016.

Stakeholders’ feedback will be an important source of input for the IAASB in carrying out the information gathering activities related to the Auditor Reporting Post-Implementation Review (PIR), which will assist the Board to determine what possible further actions, if any, may need to be undertaken.

“The auditor’s report is the key deliverable addressing the output of the audit process,” said Tom Seidenstein, chair of the IAASB. “Investors and other users of financial statements have called for auditors to provide more relevant information in the auditor’s report based on the audit that was performed. The 2015 revision of the Auditor Reporting Standards was an important step aimed at improving the value of the financial statement audit and the continued relevance of the auditing profession. The IAASB is now seeking comment on whether the revised standards are achieving this goal.”

All interested stakeholders are invited to participate in this global request for input to the PIR, including investors and other users of financial statements, auditors and audit firms, preparers of financial statements, those charged with governance, national standard setters, professional accountancy organizations, and regulators and audit oversight bodies. Stakeholders also are encouraged to share the online survey with their respective networks in their jurisdictions that engage with auditors or use auditor reports.

Stakeholders are invited to complete the Survey until October 23, 2020.

The International Auditing and Assurance Standards Board (IAASB) and the International Ethics Standards Board for Accountants (IESBA) today welcomed the Monitoring Group’s recently released Paper: Strengthening the International Audit and Ethics Standard-Setting System, aimed at enhancing governance arrangements of the two standard-setting boards. 

The enhancements reflected in the Monitoring Group’s Paper will support the core mission of the two Boards to promulgate high quality international audit, assurance, related services and ethics standards for the accountancy profession, for worldwide application and developed in the public interest.

“The Monitoring Group’s conclusions highlight the importance of high-quality international standards, set by independent and technically expert bodies with effective oversight,” said IAASB Chairman Tom Seidenstein. “We support change that can advance our ability to deliver enhanced standards in the public interest.”  

“The task now at hand is to draw the most benefit from these changes,” said IESBA Chairman Dr. Stavros Thomadakis. “We are committed to collaborating with the Monitoring Group and others to achieve a smooth transition and effective implementation of the new arrangements.”

The Monitoring Group’s Paper encompasses items to be developed during a transition planning phase, and provides for a subsequent implementation period of approximately three years. This will allow for an orderly advancement of the Monitoring Group’s conclusions while avoiding disruption to delivery of IAASB’s and IESBA’s current Strategies and Work Plans.

For more about the International Auditing and Assurance Standard Board, visit the Board’s website at www.iaasb.org.

For more about the International Ethics Standards Board for Accountants, visit the Board’s website at www.ethicsboard.org.