The International Ethics Standards Board for Accountants and the International Auditing and Assurance Standards Board applaud the recent announcement by the International Sustainability Standards Board (ISSB) that final decisions for all technical content related to ISSB's inaugural sustainability standards have been made and that the ISSB is entering the final stages of the standards development process ahead of an expected issuance at the end of Q2 2023.

We echo the recent statement of support from the International Organization of Securities Commissions (IOSCO) and appreciate IOSCO's encouragement for our boards’ work to develop standards by the end of 2024. The IOSCO statement is a timely reminder that providing the necessary assurance and ethics standards is essential to complete the sustainability reporting and assurance standards infrastructure. We will continue to work closely with all parties as we develop our sustainability standards, which we will discuss at our respective March meetings.

The International Ethics Standards Board for Accountants (IESBA) today released final revisions to the International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code) to address holistically the various independence considerations in an audit of group financial statements. The revisions also deal with the independence and other implications of the changes made to the definition of an engagement team in the Code to align with changes to the definition of the same term in the International Auditing and Assurance Standards Board’s (IAASB) International Standards on Auditing (ISAs) and International Standards on Quality Management (ISQMs).

“Group audits play a fundamental role in safeguarding the integrity of, and public trust in, the financial markets,” said Ms. Gabriela Figueiredo Dias, IESBA Chair. “For a long time, there was a vacuum in international standards addressing the independence of audit firms and individuals involved in group audits, leading to uncertainty and inconsistent practice around the world. This standard effectively closes that gap and responds in a timely manner to a public interest need for robust and clear requirements for independence in this important area.” 

Among other matters, the revisions:

• Strengthen and clarify the independence principles that apply to:
  • Individuals involved in a group audit, including those within, or engaged by, firms that audit components within a group.
  • ​​​​​​​Firms engaged in the group audit, including firms within and outside the group auditor firm’s network.
• ​​​​​​​Specify the need for, and content of, appropriate communication on independence matters between the group auditor firm and component auditor firms participating in the group audit.
• More explicitly set out the process to address a breach of an independence provision at a component auditor firm, reinforcing the importance of transparency and appropriate communication with those charged with governance of the group.
• Amend the definitions of the terms “engagement team” and “audit team” in the Code to recognize the different and evolving engagement team structures, and address the implications of those definitional changes.
• Provide guidance to facilitate the determination of who is included in an engagement team or an audit team.
• Revise the definitions of a number of existing terms and establish new defined terms with respect to independence in a group audit context.

​​​​​​​The development of the proposals has benefited from close coordination with the IAASB’s group audits and quality management projects.

The pronouncement will be effective for audits of financial statements and group financial statements for periods beginning on or after December 15, 2023, with early adoption permitted.

Global Webinar and Other Implementation Support

The IESBA will hold a global webinar on April 18, 2023 from 9:00 to 10:00 am Eastern Time, during which members of Task Force will explain the key revisions to the Code. Click here to register.

The recording of the webinar and other supporting materials, such as an IESBA Staff publication on Frequently Asked Questions, will be available on the IESBA’s website in due course.

These revisions to the Code Relating to the Definition of Engagement Team and Group Audits address holistically the various independence considerations in an audit of group financial statements.

The International Ethics Standards Board for Accountants (IESBA) today released for public comment the Exposure Draft Proposed Revisions to the Code Addressing Tax Planning and Related Services.

The proposed revisions respond to public interest concerns about tax avoidance and the role played by consultants, including professional tax advisers, in light of revelations in recent years such as the Paradise and Pandora Papers. The proposals strengthen the ethical expectations for professional accountants in business and in public practice when performing tax planning activities for employing organizations or providing tax planning services to clients, respectively.

“The accountancy profession plays a trusted role in facilitating the efficient and effective operation of a jurisdiction’s tax system and in making it a pillar of the economic system,” said IESBA Chair Ms. Gabriela Figueiredo Dias. “However, it is crucial that there are clear and robust ethical guardrails when professional accountants assist their employing organizations’ and clients’ tax planning to safeguard the public interest. These timely proposals are also designed to provide professional accountants with practical guidance to navigate the ethical challenges in this complex area.”

Among other matters, the proposed ethical framework:

• Explains the types of threats to compliance with the fundamental ethics principles of the Code that might be created when professional accountants are involved in tax planning.
   
• Sets a clear principle that professional accountants recommend or otherwise advise on a tax planning arrangement only if they have determined that there is a credible basis in laws and regulations for it.
• Requires consideration of the reputational, commercial and wider economic consequences that could arise from the way stakeholders might view the tax planning arrangement before determining whether to proceed with the recommendation or advice.
• Provides practical guidance to assist professional accountants in navigating situations of uncertainty when carrying out tax planning.
• Deals with other practical matters, including disagreement with the client or management or those charged with governance, and documentation.

The development of the proposals has been informed by extensive fact finding and outreach to stakeholders, including three global roundtables held in April 2022.

How to Comment 
The IESBA invites all stakeholders to comment on the Exposure Draft by visiting the IESBA’s website. Comments are requested by May 18, 2023.

Global Webinars
The IESBA will hold three webinars where members of the Tax Planning and Related Services Task Force will explain the key proposals in the exposure draft. The webinars will be held virtually on:

• Monday February 27 | 10 am – 11 am EST | Click here to register
• Tuesday February 28 | 4 pm – 5 pm EST | Click here to register
• Tuesday February 28 | 9 pm – 10 pm EST | Click here to register

The Staff of the International Ethics Standards Board for Accountants (IESBA) today released a questions and answers (Q&As) publication on the revisions to the definitions of listed entity and public interest entity (PIE) in the International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code). The development of the Q&As has been informed by the extensive discussions and consultations with a wide range of stakeholder groups and the IESBA’s own deliberations during the development and finalization of the PIE revisions.

The Q&A publication is designed to highlight, illustrate or explain aspects of the PIE revisions in the Code and is intended to complement the Basis for Conclusions for the final pronouncement. It will assist national standards setters, professional accountancy organizations, and firms in adopting and/or implementing the PIE revisions. The Q&As will also assist regulators and audit oversight bodies, the corporate governance community, investors, preparers, educational bodies or institutions, and other stakeholders in understanding the revised PIE definition and related provisions in the Code. Among other things, the PIE revisions:

• Include an expanded definition of a PIE by specifying a broader list of PIE categories, including a new category “publicly traded entity” to replace the category “listed entity.”
• Recognize the essential role local bodies responsible for the adoption of the Code play in delineating the specific entities that should be scoped in as PIEs in their jurisdictions, encouraging them to properly define the PIE categories in the expanded definition and adding any other categories relevant to their environments.
• Introduce a transparency requirement for firms to publicly disclose the application of independence requirements for PIEs where they have done so.

The PIE revisions are effective for audits of financial statements for periods beginning on or after December 15, 2024. Read the revisions here.

This Q&A publication is designed to highlight, illustrate, or explain aspects of the PIE revisions in the Code and is intended to complement the Basis for Conclusions for the final pronouncement.

The International Federation of Accountants (IFAC), the voice of the global accountancy profession, announces that Helen Partridge has been named Chief Financial Officer, effective April 1, 2023.  

Ms. Partridge, who joined IFAC in 2020, assumes leadership for IFAC’s finance team and financial activities, including accounting, financial strategy, planning and analysis, and tax.  Previously, Ms. Partridge oversaw IFAC’s Accountancy Education platform, enhancing the multi-stakeholder model, significantly expanding the EdExchange Summit, and driving knowledge-sharing programming for Education Directors. 

On her appointment Ms. Partridge said, “I am delighted with the opportunity to further elevate the strategic role of finance within IFAC, and to help shape IFAC’s strategy in support of the global profession.  I have never been more convinced of the growing importance of --and need for-- professional accountants, whose expertise is integral to the creation and management of sustainable companies, economies and societies.” 

Ms. Partridge continued, “I also look forward to continued involvement in Accountancy Education, which remains a personal and professional passion.  Bruce Vivian, our new head of Accountancy Education, brings a wealth of experience to the role.  I have no doubt that he, in ongoing partnership with the International Panel on Accountancy Education, will only further accelerate our strong momentum.” 

Kevin Dancey, Chief Executive Officer, said, “Helen is a high-impact executive with a proven track record of success in advancing IFAC’s Accountancy Education platform.  As she moves into the CFO role, I have every confidence she will be an excellent partner to me and the IFAC management team in delivering on our strategy.” 

Prior to joining IFAC, Ms. Partridge was an accountant in practice, having spent 16 years with PwC in audit, advisory and audit systems design in the US and Asia Pacific. She has also served in the controllership function at a large multinational transportation company working with GAAP conversions, financial statement preparations and complex and significant transactions such as business combinations and tax planning. Ms. Partridge is a CPA licensed in multiple states in the United States. 

In addition to Ms. Partridge, other women leaders at IFAC include Jennifer DiClerico, Head of Communications; Linda Lach, Head of Governance; and Elaine Young, Head of Human Capital. Partridge succeeds Russell Guthrie, who will be leaving IFAC in June after a successful 22-year career in various leadership capacities including finance, strategy, capacity building and member and external relations.

About IFAC

IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of more than 180 members and associates in 135 jurisdictions, representing more than 3 million accountants in public practice, education, government service, industry, and commerce. 

The International Ethics Standards Board for Accountants (IESBA) and International Auditing and Assurance Standards Board (IAASB) welcome the report released today by the International Organization of Securities Commissions (IOSCO) on developing a global assurance framework for sustainability-related corporate reporting. The IOSCO report reflects extensive research and feedback from key stakeholders. The report calls for timely development of ethics and assurance standards for sustainability reporting by the IESBA and the IAASB, respectively.

The IESBA and the IAASB have responded to growing demand for high-quality assurance over sustainability-related information to enhance the reliability of corporate reporting by prioritizing their projects to develop relevant and complementary standards. Both the IESBA and IAASB will issue public consultations later this year on standards for sustainability ethics and assurance, respectively. Both boards plan to finalize their respective standards in 2024. IOSCO called for widespread outreach to ensure the standards meet the needs of users and benefit from diverse stakeholder input, among other recommendations. Both boards emphasize their commitment to address key considerations and recommendations presented in the IOSCO report.

Commenting on the IOSCO report, Gabriela Figueiredo Dias, IESBA chair, stated, “We appreciate IOSCO's leadership in coordinating global consistency in sustainability assurance. The ethics standards that the IESBA is developing aim at supporting a robust ethical and independent approach to sustainability reporting and assurance in the public interest. We are involving all stakeholders at an early stage through global and inclusive consultation. We will continue to work collaboratively with IOSCO and other stakeholders to support a globally coordinated approach to ethics and assurance for sustainability reporting.”

Tom Seidenstein, IAASB chair, added, “We share the sense of urgency highlighted in IOSCO’s report, are on track to delivering a high-quality standard on time, and embrace the report’s call for an inclusive process. Our efforts will include outreach to a wide range of stakeholders to ensure our standards are of high quality, meet the needs of users, and are profession-agnostic. The IAASB will intensify external outreach in the second half of 2023 in conjunction with the publication of a draft sustainability assurance standard.”

About the IESBA
The International Ethics Standards Board for Accountants serves the public interest by setting ethics standards, including independence requirements, to underpin ethical behavior in the production, reporting and assurance of financial and non-financial information. Along with the International Auditing and Assurance Standards Board, the IESBA is part of the International Foundation for Ethics and Audit. The Public Interest Oversight Board (PIOB) oversees IESBA and IAASB activities and the public interest responsiveness of the standards. For copyright, trademark, and permissions information, please visit Permissions.

About the IAASB
The International Auditing and Assurance Standards Board develops auditing, assurance, related services, and quality management standards and guidance in the public interest that support consistent performance of quality engagements. Along with the International Ethics Standards Board for Accountants, the IAASB is part of the International Foundation for Ethics and Audit. The Public Interest Oversight Board oversees IAASB and IESBA activities and the public interest responsiveness of the standards. For copyright, trademark, and permissions information, please visit Permissions.

The International Ethics Standards Board for Accountants (IESBA) and International Auditing and Assurance Standards Board (IAASB) welcome the report released today by the International Organization of Securities Commissions (IOSCO) on developing a global assurance framework for sustainability-related corporate reporting. The IOSCO report reflects extensive research and feedback from key stakeholders. The report calls for timely development of ethics and assurance standards for sustainability reporting by the IESBA and the IAASB, respectively.

The IESBA and the IAASB have responded to growing demand for high-quality assurance over sustainability-related information to enhance the reliability of corporate reporting by prioritizing their projects to develop relevant and complementary standards. Both the IESBA and IAASB will issue public consultations later this year on standards for sustainability ethics and assurance, respectively. Both boards plan to finalize their respective standards in 2024. IOSCO called for widespread outreach to ensure the standards meet the needs of users and benefit from diverse stakeholder input, among other recommendations. Both boards emphasize their commitment to address key considerations and recommendations presented in the IOSCO report.

Commenting on the IOSCO report, Gabriela Figueiredo Dias, IESBA chair, stated, “We appreciate IOSCO's leadership in coordinating global consistency in sustainability assurance. The ethics standards that the IESBA is developing aim at supporting a robust ethical and independent approach to sustainability reporting and assurance in the public interest. We are involving all stakeholders at an early stage through global and inclusive consultation. We will continue to work collaboratively with IOSCO and other stakeholders to support a globally coordinated approach to ethics and assurance for sustainability reporting.”

Tom Seidenstein, IAASB chair, added, “We share the sense of urgency highlighted in IOSCO’s report, are on track to delivering a high-quality standard on time, and embrace the report’s call for an inclusive process. Our efforts will include outreach to a wide range of stakeholders to ensure our standards are of high quality, meet the needs of users, and are profession-agnostic. The IAASB will intensify external outreach in the second half of 2023 in conjunction with the publication of a draft sustainability assurance standard.”

About the IESBA
The International Ethics Standards Board for Accountants serves the public interest by setting ethics standards, including independence requirements, to underpin ethical behavior in the production, reporting and assurance of financial and non-financial information. Along with the International Auditing and Assurance Standards Board, the IESBA is part of the International Foundation for Ethics and Audit. The Public Interest Oversight Board (PIOB) oversees IESBA and IAASB activities and the public interest responsiveness of the standards. For copyright, trademark, and permissions information, please visit Permissions.

About the IAASB
The International Auditing and Assurance Standards Board develops auditing, assurance, related services, and quality management standards and guidance in the public interest that support consistent performance of quality engagements. Along with the International Ethics Standards Board for Accountants, the IAASB is part of the International Foundation for Ethics and Audit. The Public Interest Oversight Board oversees IAASB and IESBA activities and the public interest responsiveness of the standards. For copyright, trademark, and permissions information, please visit Permissions.