The International Federation of Accountants (IFAC) has submitted a comment letter to the International Ethics Standards Board for Accountants (IESBA) on its exposure draft for proposed revisions to the IESBA Code relating to the use of external experts.
External experts can improve the quality of reporting and assurance. They are an important resource, especially for small- and medium-sized practices, where there is often less in-house specialist knowledge. Standards in this area should not discourage the use of experts, and any requirements should be clear—and consistent with the corresponding reporting and assurance standards.
IFAC’s response highlights the potential that proposed revisions could undermine the quality of reporting and assurance engagements by creating inappropriate barriers to the use of external experts. Proposals for subjective evaluation of competence, capability, and objectivity could prevent the use of experts based on perceived, rather than meaningful, challenges to ethical behavior. New requirements for information gathering in some areas appear excessive and impractical. The exposure draft also has notable inconsistencies in approach and terminology with the International Auditing and Assurance Standards Board's (IAASB) proposed International Standard on Sustainability Assurance (ISSA) 5000.
IFAC will remain engaged with the IESBA’s consultation process until the publication of a final revision and supporting guidance materials.