The International Ethics Standards Board for Accountants (IESBA) today released for public comment proposed revisions to the International Code of Ethics for Professional Accountants (including International Independence Standards).

The Exposure Draft Proposed Technology-related Revisions to the Code seeks to enhance the Code’s robustness and expand its relevance in an environment being reshaped by rapid technological advancements. The proposed amendments will guide the ethical mindset and behavior of professional accountants in business and in public practice as they deal with changes brought by technology in their work processes and the content of the services they provide. 

“Technological innovation is transforming the world of business and professional services in ways we would never have imagined even a decade ago,” said IESBA Chair Ms. Gabriela Figueiredo Dias. “Technology is not neutral, and professional accountants’ working relationship with it must be shaped by ethics. These timely proposals are designed to emphasize and strengthen the ethical principles that should guide them as they navigate the challenges and take advantage of the opportunities created by these developments, recognizing ultimately their responsibility to act in the public interest.”

Among other matters, the proposals:

• Draw special attention to the professional competence and confidentiality imperatives of the digital age. 
• Address the ethical dimension of professional accountants’ reliance on, or use of, the output of technology in carrying out their work. 
• Further enhance considerations relating to threats from the use of technology as well as considerations relating to complex circumstances in applying the Code’s conceptual framework. 
• Strengthen and clarify the International Independence Standards (IIS) with respect to technology-related non-assurance services (NAS) firms may provide to their audit clients or technology-related business relationships they may enter into with their audit clients.
• Explicitly acknowledge that the IIS that apply to assurance engagements are applicable to assurance engagements on non-financial information, for example, environmental, social, and governance (ESG) disclosures.

The development of the proposals has been informed by extensive fact-finding work and outreach to stakeholders.

The proposed revisions build on the role and mindset changes that became effective last December, and the revised NAS provisions that will become effective in December 2022.

How to Comment

The IESBA invites all stakeholders to comment on the Exposure Draft by visiting the IESBA website. Comments are requested by June 20, 2022.

The International Federation of Accountants (IFAC), which comprises 180 member and associate organizations and represents over 3 million professional accountants globally, welcomes the opportunity to provide input into the European Commission’s work to enhance corporate reporting—including a focus on corporate governance, statutory audit, and supervisory aspects of the ecosystem that delivers relevant, reliable, and comparable information to stakeholders.

As the voice of the global accountancy profession, IFAC understands the crucial role that auditors, as well as professional accountants more broadly, play in high-quality corporate reporting.  But no matter how skilled or well-resourced, auditors alone cannot overcome significant shortcomings in other key areas of the reporting ecosystem—especially the role of directors, audit committees, and those charged with governance.

IFAC believes that global standards promote global methodologies, which lead to enhanced and more consistent quality in both reporting and assurance.  We support high-quality, globally-applicable standards for financial reporting developed by the IASB, sustainability disclosure developed by the ISSB, audit and assurance developed by the IAASB, as well as the IESBA International Code of Ethics.  We also believe audit firms are best placed to provide not only audits of financial statements but also assurance on sustainability disclosures.

IFAC CEO Kevin Dancey said, “Corporate governance, audit, and supervision have historically focused on financial statement reporting for investors and other providers of capital.  But now that sustainability-related disclosure is becoming mainstream, this information must also be high-quality and trustworthy.  The accountancy profession, with its responsibility to act in the public interest, has an essential role to play in this evolution of corporate reporting.”

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 180 members and associates in 135 countries and jurisdictions, representing more than 3 million accountants in public practice, education, government service, industry, and commerce.

The Fast Future With IFAC is a conversational podcast series that features innovative SMPs sharing how they’re adapting to the rapidly changing global economy.

Episode one features an interview with Amela Kmetas, a member of the Chartered Accountants of Australia and New Zealand (CAANZ). Her small firm in Melbourne, Australia specializes in taxation advice, management accounting, budgeting, and bookkeeping.

Our host, IFAC principal Kristy Illuzzi, spoke with Amela about many pressing issues facing the SMPs, including:

• The impact of technological advances on the firm’s business model
• The firm’s experience with cybersecurity
• Covid-19’s effect on the firm, its clients, and its employees
• Advisory services
• Recruiting and hiring

Visit IFAC's iTunes podcast channel or click below to listen to this episode of The Fast Future With IFAC.

Stay tuned for our next conversation with an innovative practitioner, coming in March.

(Back to the Fast Future With IFAC homepage.)

To mark this year’s International Women's Day (IWD), we have invited two empowering leaders and diversity champions: