The International Ethics Standards Board for Accountants® (IESBA®) issued an Exposure Draft proposing changes to Part C of the Code of Ethics for Professional Accountants (the Code) addressing the presentation of information and pressure to breach the fundamental principles. The proposed changes respond to a need for more robust and practical guidance to help professional accountants in business deal with two matters on which they most often seek assistance in practice: their responsibility to produce financial reports that are faithful representations of the economics of transactions, and pressure to breach fundamental ethical principles.
The IFAC Professional Accountants in Business Committee is developing a response that provides the perspective of professional accountants in business. Overall, we agree with the proposed changes as they will support and strengthen the position of the professional accountant in business. As these are two key issues for professional accountants in business, these changes are timely and relevant.
But we also have a few concerns and consequential recommendations. In their day-to-day work, the potential risk of breaching the fundamental principles within the Code posed by the presentation of information and/or pressures is not always clear to professional accountants in business. The revised Part C helps provide greater awareness of these issues but is insufficient. Ideally, IFAC member bodies should be required to complement this guidance with additional awareness and/or CPD training.
In addition, we believe that explicitly addressing these issues is useful when communicating with external stakeholders and those who use or rely on the services of professional accountants, as it clearly demonstrates what behavior or situations members of the profession will not tolerate.
Please let us know if you agree with our proposed response. Of course, you can also submit your own response to the Exposure Draft before April 15, 2015.
