The proposals address safeguards-related provisions in the independence sections of the Code of Ethics for Professional Accountants pertaining to non-assurance services provided to audit and other assurance clients.
The Phase 2 proposals (Structure Exposure Draft-2) restructure select sections of the Code, including recently finalized provisions addressing:
The IESBA Update summarizes the second and final phase of the board's Structure of the Code project. The aim of the project is to comprehensively review the structure and drafting of the IESBA Code of Ethics for Professional Accountants™ (the Code) to enhance its understandability and usability, thereby facilitating its adoption, effective implementation, consistent application, and enforcement.
The Basis for Agreement in Principle documents summarize the feedback received from respondents to Structure ED-1 and Safeguards ED-1. They explain the rationale for the IESBA’s decisions in agreeing in principle the text of Phase 1 of the Structure and Safeguards projects.
The agreed-in-principle text contains:
The proposals clarify the applicability of the requirements and application material in extant Part C, Professional Accountants in Business, of the Code of Ethics for Professional Accountants to professional accountants in public practice.
Approved by the IESBA at its March 2016 meeting, the changes strengthen the Code's Part C provisions addressing the responsibilities of professional accountants in business (PAIB) when preparing or presenting information. They also provide new requirements and guidance for PAIBs regarding pressure to breach the fundamental principles.
Approved by the IESBA at its December 2016 meeting, the changes to provisions addressing long association of personnel with an audit or assurance client contain a number of substantive improvements, including a strengthened partner rotation regime for audits of public interest entities.
IESBA Technical Advisor for Michael Ashley
United Kingdom
James Barbour is Director, Policy Leadership, at the Institute of Chartered Accountants of Scotland (ICAS), where he oversees the areas of Audit and Assurance, Ethics and Financial Reporting. He is also responsible for the ICAS Ethics Board and is the lead on all matters connected with The Power of One initiative. Mr. Barbour qualified as a CA in 1996 and worked in general practice (primarily audit) with one of Scotland’s largest independent firms before joining ICAS in 1999.
Mr. Barbour is a member of Accountancy Europe (AE)’s Professional Ethics and Competencies Working Group, and the ICAS representative at the AE Members’ Assembly. He is a member of the UK Government’s stakeholder group for the implementation of EU Audit legislation and a former member of the stakeholder group involved in the implementation of the EU Accounting Directive.
Mr. Barbour regularly represents ICAS at meetings with standard-setting bodies, government bodies, regulators, and others concerning various business and technical issues, such as audit and assurance, corporate reporting, ethics, and Brexit. He is also a member of the UK Financial Reporting Council’s Audit Technical Advisory Group and an Honorary Professor in the Adam Smith Business School at the University of Glasgow.
Japan
Hironori Fukukawa became a member of the International Ethics Standards for Accountants in January 2017. He was nominated by the Japanese Institute of Certified Public Accountants (JICPA).
Prof. Fukukawa is a Professor of Accounting at Hitotsubashi University, Japan. He earned a bachelor’s degree, a master’s degree and a PhD (accounting) from Hitotsubashi University. He was a Fulbright Visiting Scholar at the University of Southern California from 2003 to 2004. He served as the Vice Dean of the Graduate School of Commerce and Management of Hitotsubashi University (2014–2016).
His research interests include auditors’ risk assessments and audit planning decisions, the effects of professional skepticism on auditors’ judgment and decision making, and audit market and audit pricing issues. He has published research articles in several academic journals including: Auditing: A Journal of Practice & Theory, Abacus, International Journal of Auditing, and International Journal of Approximate Reasoning.
Brazil
Vania Borgerth was appointed to the International Ethics Standards Board for Accountants (IESBA) in January 2021 as a self-nominated public member.
Ms. Borgerth has served as the Head of Brazilian Network for Integrated Reporting since 2012 and is a member of the Expert Panel of Accounting for Sustainability – A4S. She is a Board Member at SHIFT Project and serves as the Brazilian Institute for Corporate Governance’s representative at the International Integrated Reporting Council. She is a Member of the International Standards for Accounting and Reporting, (an arm of UNCTAD) and is the former Head Accountant at the Brazilian Development Bank (BNDES) - responsible for promoting transparency best practices, such as international accounting and auditing standards, corporate governance and the Integrated Reporting both in Brazil and abroad (1992-2020).
Ms. Borgerth is also the former Brazilian representative at the Advisory Council of the IFRS (2015-2020) and the Consultative and Advisory Groups of the IAASB – International Auditing and Assurance Standards Board(2010-2019) and IESBA- International Ethics Standards Board for Accountants (2015-2019).
Ms. Borgerth is a PhD student at FUCAPE Business School, where she is also a lecturer.
