IESBA publishes technology report

Completing Phase 1 of a multi-phased project to evaluate the impact of technology on the ethical conduct of professional accountants (PAs), the International Ethics Standards Board for Accountants (IESBA) published a report that focused on artificial intelligence (AI), big data and data analysis, areas considered to impact the accounting profession most at this time.

The Technology Working Group (TWG) performed extensive research, including outreach with numerous associations, firms and individuals. The report describes the TWG recommendations, including possible changes to the International Code of Ethics for Professional Accountants (including International Independence Standards), the "Code," nonauthoritative guidance and subject matters for analysis in Phase 2 of the project.

Recommendations include the following: 

  • Add new application material to the Code that would provide for a broader role for PAs to model and promote ethical conduct, especially when developing and using technology.
  • Revise the Code to more explicitly address threats created by the complexities of modern professional practice.
  • Revise the Code to foster greater transparency by PAs in conducting their work.
  • Amend the Code to enhance the notion of accountability, e.g. when relying on work of external experts or intelligent agents (AI).
  • Revise the Code's provision on confidentiality to address data protection and privacy matters.
  • Add application material that would acknowledge the growing importance of soft skills, such as communication skills, agility, ethics and emotional intelligence.
  • Consider amendments to the independence rules, e.g., possible formation of business relationships when firms sell or license software applications to audit clients or use the client's software to deliver nonassurance services to another entity, provision of technology-related services to audit clients, and significance of the term "office" as currently described, given the prevalence of remote working situations.

The TWG also recommends that IESBA provide nonauthoritative guidance,for example, maintaining confidentiality in a digital environment and promoting an ethics-based culture, to various stakeholder groups.

Recommendations for Phase 2 are: 

  • Initiate a formal project and task force to consider potential changes to the Code as set out in Section 2 of the report.
  • Commence information-gathering beyond AI and data analytics, to include for example, cyber-security, blockchain, crypto-currencies and initial coin / security token offerings. The TWG would initiate the research and help develop nonauthoritative guidance as described in part 3 of the report.