In mid-July, the IESBA^® launched a Twitter handle to increase engagement with the public and with professional accountants worldwide, enhance its profile and brand, and increase the transparency and timeliness of its communications. Stay current on the IESBA’s projects, publications, and meeting decisions, as well as the latest accounting and business ethics news, trends, and resources from around the world. We hope you’ll stay connected and join us at @Ethics_Board.

The 2014 Handbook of the Code of Ethics for Professional Accountants™ is now available. The 2014 edition incorporates several revised pronouncements that were published previously and are now effective—addressing a breach of a requirement of the Code, conflicts of interest, and the definition of “those charged with governance.” It also contains the revised definition of “engagement team” (effective for audits of financial statements for periods ending on or after December 15, 2014).

To access the handbook for personal use or to purchase print copies (US $65.00, plus shipping & handling), see Handbook of the Code of Ethics for Professional Accountants.  In connection with the Structure of the Code project (see below), a web-based version of the Code—with enhanced accessibility and navigability—is currently in development and expected to go live in Q4. 

The Ethics Board approved, subject to confirmation by the Public Interest Oversight Board (PIOB) that due process has been followed, its Strategy and Work Plan, 2014-2018, expected for publication by early October 2014. As part of its due process to seek stakeholder input in the plan’s development, the board previously issued a draft of the strategy and work plan for public consultation. View the Consultation Paper and 38 comment letters.

The Ethics Board approved for public comment changes to the provisions in Section 290 of the Code of Ethics for Professional Accountants (the Code) dealing with long association of senior personnel with an audit client. The Exposure Draft (ED) responds to several issues raised by stakeholders, including issues of independence in appearance. The ED broadly covers the following areas:

• Strengthening the general provisions that apply to all audit engagements;
• Increasing the mandatory cooling-off period for the engagement partner on the audit of a client that is a public interest entity;
• Strengthening the restrictions on the type of activities that can be undertaken by any former key audit partner during the cooling-off period; and
• Ensuring the concurrence of those charged with governance with respect to the application of certain exception paragraphs.

The ED also includes corresponding changes to Section 291 of the Code dealing with long association of senior personnel with an assurance client. The ED is expected for release in mid-August with a 90-day comment period.

The Ethics Board considered the Task Force’s preliminary draft Consultation Paper, setting out proposals for improving the clarity and usability of the Code. Among other matters, the board discussed:  

• The approach to coordinating a review of safeguards in the Code (see non-assurance services below) with the work on restructuring the Code;
• The approach to clarifying responsibility for compliance with the Code in particular circumstances;
• Alignment of the timing of deliverables on other projects in progress with the restructuring work; and
• General structure and reorganization matters.

In connection with this project, a web-based version of the current 2014 Code is currently being developed to improve its accessibility and navigability. The IESBA will consider a revised draft of the Consultation Paper with a view to approval at its October 2014 meeting.

The Ethics Board considered and provided input on proposed changes to the following sections of Part C—Professional Accountants in Business of the Code:

• Section 320—an existing section addressing the preparation and reporting of information; and
• Section 370—a proposed new section addressing the topic of pressure by superiors and others to breach the fundamental principles.

Among other matters, the board also discussed Task Force proposals addressing the misuse of discretion under the applicable reporting framework in order to mislead. At its October 2014 meeting, the board will consider revised drafts of the proposed changes to Part C with a view to approval for public exposure.

In May, the Ethics Board released an Exposure Draft (ED), Proposed Changes to Certain Provisions of the Code Addressing Non-Assurance Services for Audit Clients, aimed at enhancing the independence provisions in Section 290 (Independence—Audit and Review Engagements) by:

• Giving auditors providing non-assurance services to an audit client additional guidance and clarification on what constitutes management responsibility, including enhanced guidance on how auditors can better satisfy themselves that client management will make all the judgments and decisions that are its responsibility;
• With respect to the preparation of accounting records and financial statements for non-public interest entity (non-PIE) audit clients, offering better guidance and clarification regarding the concept of “routine or mechanical” services; and
• Removing the provision that permits an audit firm to provide certain bookkeeping and taxation services to PIE audit clients in emergency situations.

The ED also includes proposed enhancements to corresponding non-assurance services provisions in Section 291 of the Code with respect to assurance clients. Comments are requested by August 18.

Please note: An editorial correction has been made to the ED. The mark-up section now shows the proposed deletion of paragraphs, 290.164, 290.174, and 291.145, which had inadvertently been omitted in the original file.

In advance of the final pronouncement addressing non-assurance services, the Ethics Board had considered developing a position paper on the topic, but agreed at its July meeting that a work stream on safeguards should be completed before determining the nature, scope, and timing of such a paper. The board asked the Task Force to present a project proposal on safeguards for board consideration as soon as possible. The board will consider the significant comments received on the ED at its October 2014 meeting.

In May and June, the Ethics Board held its first two global roundtables, in Hong Kong and Brussels, and met with its national standard setter liaison group to gain feedback from stakeholders on the project addressing professional accountants’ responsibilities regarding suspected non-compliance with laws and regulations. The roundtables were very successful, with active participation and engagement from over 50 invited senior-level delegates at each event.

At its July meeting, the board received an update on these discussions and it will receive an update on the third and final global roundtable (Washington, DC on July 10) at its next meeting in October. Based on the input received and other considerations, the board will decide whether to produce and issue a revised Exposure Draft on responding to suspected non-compliance with laws and regulations in 2015.

Earlier this year, the International Federation of Accountants (IFAC) launched the Global Knowledge Gateway, a new digital hub for the global accountancy profession: www.ifac.org/gateway. The Gateway serves professional and aspiring accountants in all sectors by providing streamlined access to relevant resources, news, discussions, and thought leadership in nine different areas, including ethics. Resources in this area, designed to serve both accountants in business and in practice, include surveys and reports on business ethics issues, as well as practical guidance on implementing the IESBA Code and other codes of conduct.

We invite you to explore and contribute your views to the discussions, recommend content that you find the most useful, suggest new resources, and subscribe to receive customized updates on new content added to the Gateway. Register to take full advantage of all of these features. 

Meetings of the Ethics Board and the Ethics Board’s Consultative Advisory Group (CAG) are open to the public. The next meeting of the board will be held in New York, New York, USA, on October 13-15, 2014. The next CAG meeting will be held in New York, New York, USA, on September 9-10, 2014.

For more information and to register to attend an Ethics Board or Ethics Board CAG meeting as an observer, visit Ethics Board Meetings  and Ethics Board CAG Meetings respectively.

The 2014 World Congress of Accountants (WCOA) will be hosted by the Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (CNDCEC) in Rome, Italy, later this year. Themed 2020 Vision: Learning from the Past, Building the Future, the WCOA 2014 will be held November 10-13 at the Auditorium Parco della Musica. More than 4,000 professionals from around the world will convene at this quadrennial IFAC event. WCOA 2014 will look back to explore the evolution of the accountancy profession and forward to showcase the innovations that will shape its future. Day 3 features a session on ethics: “Code of Ethics: Shaping Behavior.”  View the full agenda and register here.

The WCOA also provides a global platform for organizations and firms to share their projects and visions via various sponsorship opportunities. For more information, please contact info@wcoa2014rome.com or Dimarco@wcoa2014rome.com.