The International Ethics Standards Board for Accountants (IESBA) has announced completion of the first phase of its project to restructure its Code of Ethics for Professional Accountants (Ethics Code) and has released exposure drafts of proposals to strengthen ethics requirements for accountants.
The IESBA has established a new structure and drafting convention for the Ethics Code. The purpose of the project is to make the Ethics Code more understandable and easier to use, which the IESBA expects will facilitate its adoption and effective implementation globally. In addition, the IESBA has proposed enhancements to the conceptual framework of ‘threats and safeguards’.
The IESBA exposure drafts include:
- Improving the Structure of the Code of Ethics for Professional Accountants—Phase 2 (Structure ED-2), which proposes restructuring certain sections, including recently finalised provisions addressing (a) accountants’ response to non-compliance with laws and regulations (NOCLAR), (b) long association of audit firm personnel with an audit or assurance client, and (c) ethical issues that professional accountants in business (PAIBs) often face (see article). Comments on Structure ED-2 are due by 25 May 2017.
- Proposed Revisions Pertaining to Safeguards in the Code—Phase 2 and Related Conforming Amendments (Safeguards ED-2), which proposes revisions to the safeguards-related provisions in the independence sections of the Ethics Code pertaining to non-assurance services provided to audit and other assurance clients. The comment due date for Safeguards ED-2 is 25 April 2017.
- Proposed Revisions to Clarify the Applicability of Provisions in Part C of the Extant Code to Professional Accountants in Public Practice (Applicability ED), which proposes clarifications to the applicability of PAIB provisions to professional accountants in public practice The comment due date for the Applicability ED is 25 April 2017.
The IESBA expects to complete the project by December 2017. The restructured Ethics Code will be renamed International Code of Ethics for Professional Accountants (including International Independence Standards). The restructured Ethics Code will contain significant new requirements and revised provisions that the IESBA has already finalised.
The exposure drafts are available on this link.
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