This week, the IFAC's International Ethics Standards Board for Accountants (IESBA) issued three (3) exposure drafts (EDs), completing the first major phase of its ambitious plan to restructure and strengthen the IESBA Code of Ethics For Professional Accountants, including independence. The proposal documents are:
(1) STRUCTURE ED-2. This ED restructures certain sections of the Code, adopts a new drafting convention, and includes new rules on responding to noncompliance with laws and regulations (NOCLAR), long association of audit firm personnel with an audit client, and ethics issues faced by professional accountants in business (PAIBs). Comments are due: 5/25/17
(2) SAFEGUARDS ED-2. This ED proposes changes to the safeguards-related rules in the Independence sections as they relate to non-assurance services provided to assurance clients and includes enhancements to the Conceptual Framework's threats and safeguards approach. Comments are due: 4/25/17
(3) APPLICABILITY. This ED clarifies the manner in which certain PAIB provisions in the Code also apply to accountants in public practice. According to this ED, the IESBA believes that it is possible for PAPPs (professional accountants in public practice) to find themselves in ethically problematic circumstances that do not involve clients and hence face some of the same issues and ethical dilemmas as PAIBs. Comments are due: 4/25/17
The IESBA Code sets the foundation for many ethics codes applicable to accountants throughout the world, thus IESBA's objective is to make the Code useful and understandable, which should facilitate its adoption, effective and consistent implementation, and enforcement.