IESBA is restructuring its code of ethics, which establishes ethical requirements for professional accountants worldwide, in a bid to make it more understandable and easier to use, thereby facilitating its adoption and effective implementation globally.
During the first stage of the restructuring project, the board implemented a new structure and drafting convention and successfully restructured a portion of the code.
The IESBA also agreed revisions to a number of provisions pertaining to safeguards in the code, including enhancements to the conceptual framework of “threats and safeguards”.
The board issued three final proposals, which are open for comment via the ethics board’s website.
The first proposal seeks to restructure select sections of the code, including recently finalised provisions addressing accountants’ response to non-compliance with laws and regulations, long association of audit firm personnel with an audit or assurance client, and ethical issues that professional accountants in business often face.
The second seeks revise the safeguards-related provisions in the independence section of the code pertaining to non-assurance services provided to audit and other assurance clients.
The final proposal wishes to clarify the applicability of professional accountant in business provisions to professional accountants in public practice.
The board said the proposals will enhance and complete the fully restructured code with strengthened ethics requirements for accountants.
IESBA chairman Stavros Thomadakis, “This major upgrade will lead not only to a code that is more understandable and easier to use but also to a more robust code with important substantive improvements in many areas, including auditor independence. These goals ultimately underpin the public interest role of the global accountancy profession.”
The IESBA hopes to have completed its restructure of the code by December 2017. The code will then be renamed International Code of Ethics for Professional Accountants (including international Independence Standards).
The updated code will contain significant new requirements and revised provisions including a greater emphasis on compliance; clarified and strengthened provisions regarding application of the conceptual framework; a strengthened partner rotation regime for audits of public interest entities; provisions addressing accountants’ responsibilities regarding non-compliance with laws and regulations; more comprehensive provisions addressing professional accountants in business' responsibilities when preparing or presenting information; and new requirements and guidance for professional accountants in business regarding pressure to breach the fundamental principles.