SMPC Response to IESBA Consultation Paper: Improving Structure of the Code of Ethics for Professional Accountants

The IFAC SMP Committee supports the approach taken by the International Ethics Standards Board for Accountants (IESBA) and the general direction of the project to improve the usability of the structure of the Code of Ethics for Professional Accountants (the Code). In particular, the SMP Committee agrees with the proposal to clearly separate the requirements from guidance, as it will enhance users’ understanding of the specific prohibitions.

However, in regard to the possibility of creating separate standards on specific topics and rebranding the Code, the committee believes this would be a completely separate way to restructure the Code, a more onerous undertaking, and a move away from a principles-based to a more rules-based version of the Code. In addition, the committee agrees that the Code needs to be clear as to the respective responsibilities of firms on the one hand, and the individual professional accountants on the other, but it does not necessarily need to ensure that firms go as far as assigning the firm’s responsibilities to a particular individual. It would also be helpful if the Code could more clearly differentiate the provisions applicable to public interest entities (PIEs) from those applicable to other entities, especially in respect to auditor independence.