The International Auditing and Assurance Standards Board (IAASB) today released International Standard on Auditing (ISA) 250 (Revised), Consideration of Laws and Regulations in an Audit of Financial Statements, and conforming amendments to other International Standards, which respond to new requirements in the International Ethics Standards Board for Accountants (IESBA)’s Code of Ethics for Professional Accountants addressing non-compliance with laws and regulations (NOCLAR). The revisions enable the IAASB’s International Standards to continue to be applied effectively alongside the IESBA Code, and clarify and emphasize key aspects of the IESBA Code in the IAASB’s Standards.

“The IESBA has established clear expectations for professional accountants in responding to non-compliance with laws and regulations, representing an important contribution to the public interest,” said IAASB Chairman Prof. Arnold Schilder. “It is only fitting that the IAASB’s International Standards acknowledge and reflect these important changes, and, thereby, reinforce the public interest role played by auditors and professional accountants who provide services covered by our Standards.”

ISA 250 (Revised) will be effective for audits of financial statements for periods beginning on or after December 15, 2017. Amendments to the IAASB’s International Standards for other services have a similar effective date.

“Among other enhancements, the changes to ISA 250 prompt the auditor to think about whether to report identified or suspected NOCLAR to an appropriate authority outside the entity, taking into consideration the provisions of laws, regulations, or relevant ethical requirements in their jurisdiction, and to consider the impact of NOCLAR on the audit,” explained James Gunn, Managing Director, Professional Standards. “It is important that the IAASB and IESBA have acted contemporaneously on such an important public interest matter.”

Also available is a staff-prepared At a Glance document, explaining the main changes from the extant ISA and other International Standards, and Basis for Conclusions, explaining the IAASB’s rationale for its decisions.

About the IAASB
The IAASB develops auditing and assurance standards and guidance for use by all professional accountants under a shared standard-setting process involving the Public Interest Oversight Board, which oversees the activities of the IAASB, and the IAASB Consultative Advisory Group, which provides public interest input into the development of the standards and guidance. The structures and processes that support the operations of the IAASB are facilitated by the International Federation of Accountants (IFAC). For copyright, trademark, and permissions information, please go to permissions or contact permissions@ifac.org.

In July 2016, the International Ethics Standards Board for Accountants (IESBA) introduced new requirements to the Code of Ethics for Professional Accountants (the IESBA Code) addressing non-compliance with laws and regulations (NOCLAR), which becomes effective on July 15, 2017.

These materials are intended to help professional accountancy organizations and other accounting education providers, including universities, governments, and international donor agencies, understand and implement International Education Standard^™ (IES^™) 1, Entry Requirements to Professional Accounting Education Programs (2014)IES 1. This, in turn, supports improved accountancy education in the public interest. 

The support materials include:

The International Federation of Accountants^® (IFAC^®) and Institute of Chartered Accountants in England and Wales (ICAEW) today announced the release of their new report From Crisis to Confidence: Good Regulation, Governance, and Culture.

The report is an output of a July 2016 roundtable discussion convened by IFAC and ICAEW, which brought together 50 UK and EU chief and senior executives from business and regulatory bodies. The executives met to discuss and debate how the global regulatory environment can be enhanced—with an ultimate goal of improving confidence in the financial and capital markets, business, and government.

“The expertise of the roundtable’s participants makes their clear and candid call for stronger organizational governance all the more important. At a time when we are seeing citizens express a deepening mistrust of government and institutions through the political process, reframing the thinking around how to develop smart and effective regulation is vital,” said IFAC Chief Executive Officer, Fayez Choudhury.

Other topics discussed at the roundtable summarized in the report include:

• Governance and culture: Why almost ten years after the global financial crisis, rebuilding public trust in financial and capital markets, business, and government remains a vital goal, despite the significant progress achieved from a regulatory perspective.
• Regulatory fragmentation: How differences in cultures and expectations concerning regulation, and different legal environments, are leading to an increasingly fragmented international regulatory environment.
• Complexity of regulation: Why it is important to achieve the right balance in the regulatory environment and how unnecessary complexity is sometimes created when we seek compliance-based regulatory solutions.
• The future of regulation: How a holistic view that seeks to create a stronger system for today and tomorrow, rather than addressing past issues, is the right one for the global regulatory environment.

The second in a series of discussions, the roundtable reinforced the need for effective and smart regulation in a global economy amidst global political unrest.

Michael Izza, ICAEW Chief Executive, said, “Although regulation is only one piece of the puzzle, we cannot rebuild trust unless society has faith that those regulations protect the public interest. This trust is undermined when the rules are too complex, too fragmented, or their purpose is unclear. At the same time, we need to recognize that regulation can’t do it all. Companies must take responsibility for the way they operate. This is why we are calling for everyone to work together to end the culture of piling on more and more rules and find answers that achieve the primary aims of protecting the public and encouraging ethical behavior.”

The full report, From Crisis to Confidence: Good Regulation, Governance, and Culture, is available on the IFAC website.

ICAEW Media Enquires
James Douglass, Media Relations Manager, +44 20-7920-8718

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 175 members and associates in more than 130 countries and jurisdictions, representing almost 3 million accountants in public practice, education, government service, industry, and commerce.

About ICAEW
ICAEW is a world leading professional membership organisation that promotes, develops and supports over 147,000 chartered accountants worldwide. We provide qualifications and professional development, share our knowledge, insight and technical expertise, and protect the quality and integrity of the accountancy and finance profession.

As leaders in accountancy, finance and business our members have the knowledge, skills and commitment to maintain the highest professional standards and integrity. Together we contribute to the success of individuals, organisations, communities and economies around the world.

Because of us, people can do business with confidence.

ICAEW is a founder member of Chartered Accountants Worldwide and the Global Accounting Alliance.

About #BuildTrust
IFAC is dedicated to facilitating a conversation that puts trust and integrity at the heart of the global economy. Strong, transparent, and accountable organizational governance and smart global regulation are critical. Without them, we can’t build trust in the financial systems that underpin the world’s interconnected economy. We’d love to see you join the conversation on Twitter. Click here to spread the message and help #BuildTrust.