In the wake of an extraordinary 2020, we asked 9,000 members of Generation Z (age 18-25) about the issues that give them most concern right now. What do they want from their careers? What are they worrying about? What attracts them to organisations? What do they think about business?
This webinar will explore the implications for employers, managers and anyone who works with Gen Z, using insights drawn from roundtables around the world.
“Independence is fundamental to the role of auditors as corporate guardians and ultimately to public confidence in financial reporting and market integrity,” said IESBA Chairman Dr. Stavros Thomadakis. “With the significant strengthening of the NAS and fees provisions, we have taken bold steps to set an even higher bar for the standards of independence required of auditors globally, especially in relation to public interest entities. We believe these changes represent a major advance in the public interest.”
The package of new measures includes:
A far-reaching prohibition on audit firms from providing a NAS that might create a self-review threat to an audit client that is a public interest entity.
New provisions to enable and promote more robust engagement between auditors and those charged with governance of public interest entities about independence matters relating to NAS and fees.
Strengthened provisions to address undue fee dependency on audit clients.
Provisions to stimulate greater public transparency about fees paid by audit clients that are public interest entities to assist stakeholder judgments about auditor independence.
Comprehensive guidance to steer auditors’ threat assessments and actions in relation to NAS and fees.
“The revised NAS and fee-related provisions reflect current public interest expectations with respect to auditor independence in two important areas," said Gaylen Hansen, IESBA Consultative Advisory Group (CAG) Chair. "The IESBA CAG, with its diverse membership base, has unanimously supported and encouraged the IESBA’s formidable leadership in effecting these changes.”
The revised NAS and fee-related provisions have been informed by extensive research, global roundtables and other outreach to investors, the corporate governance community, regulators, audit oversight bodies, national standard setters, accounting firms, preparers of financial statements, and others. In addition, the development of the provisions has benefited from close coordination with the International Auditing and Assurance Standards Board (IAASB).
The revised NAS and fee-related provisions become effective for audits of financial statements for periods beginning on or after December 15, 2022. Early adoption is permitted and encouraged.
In support of global adoption and implementation of the new standards, the IESBA has developed Bases for Conclusions and other resources which are available on the IESBA’s website. Additional support materials and resources will be published in 2021.
Comprehensive Package of New Measures to Safeguard Auditor Independence in Relation to Non-Assurance Services and Fees Paid by Audit Clients
The revisions to the fee-related provisions of the code include a prohibition on firms allowing the audit fee to be influenced by the provision of services other than audit to the audit client; in the case of PIEs, a requirement to cease to act as auditor if fee dependency on the audit client continues beyond a specified period; communication of fee-related information to TCWG and to the public to assist their judgments about auditor independence; and enhanced guidance on identifying, evaluating and addressing threats to independence.
The revised NAS provisions contain substantive revisions that will enhance the International Independence Standards (IIS) by clarifying and addressing the circumstances in which firms and network firms may or may not provide a NAS to an audit or assurance client. The revised provisions include new requirements that expressly prohibit firms and network firms from providing certain types of NAS to their audit clients, especially when they are public interest entities (PIEs).
