Recently, the International Ethics Standards Board for Accountants (IESBA) released for public comment the Exposure Draft, Proposed Revision to the Code Addressing the Objectivity of Engagement Quality Reviewers. The proposed revision to the International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code) is an effort the IESBA coordinated with the International Auditing and Assurance Standards Board’s (IAASB’s) development of proposed International Standard on Quality Management (ISQM) 2, Engagement Quality Reviews.
The Exposure Draft suggests guidance on the application of the Code's conceptual framework to address the objectivity of an engagement quality reviewer (EQR), which supports proposed ISQM 2 in addressing the matter of the eligibility of an individual to serve in an EQR role. Specifically, the proposal:
• Explains the threats to compliance with the fundamental principle of objectivity that might be created in circumstances where an individual is being considered for appointment as an EQR for a given engagement;
• Provides factors to consider in evaluating the level of the identified threats; and
• Suggests actions that might be safeguards to address the threats.
The IESBA is moving on an accelerated time frame to finalize the proposal to align closely with the anticipated finalization of ISQM No. 2 in 2020.
Comments on the Exposure Draft are due March 16, 2020.