The FRC are “supportive” of the IESBA undertaking a project to improve the structure of the Code, however it has concerns about the ISA type model proposed in the consultation.  The FRC comments:

ISAs establish standards that are focussed on ensuring auditors obtain sufficient appropriate audit evidence and exercise professional scepticism. Accordingly, many of the requirements are process based. Ethics, however, is not about process but rather about good behaviours, driven by high personal values/morals and a mind-set focussed on serving the public interest.

The FRC highlights that such an approach “may further encourage a rules based mind-set with an undue focus on the requirements rather than on the fundamental principles”.  Accordingly the FRC “strongly” recommends that IESBA “considers how the Code can be improved to seek to ensure that professional accountants have the right ethical ‘mind-set’ and encourages the IESBA to “prioritise clarifying and emphasising the fundamental ethical principles”.

Before proceeding further with the project, the FRC also recommends that IESBA “undertakes further research to identify and understand the structure and presentation of ethical codes issued by other bodies”.

The full comment letter is available on the FRC website.