IFAC ethics board widens work plan to consider topical issues
May 21, 2012
The International Ethics Standards Board for Accountants (IESBA) of the International Federation of Accountants (IFAC) has released a Staff Update paper which outlines additional 'workstreams' in its work plan to consider topical issues such as auditor rotation, the provision of non-audit services by auditors, the structure of the Code of Ethics for Professional Accountants (Code) and implications of recent accounting irregularities for professional accountants in business.
Specifically, the additional workstreams are:
- Rotation - The IESBA will consider the arguments for and against a firm rotation requirement in the Code and consider whether the existing guidelines on partner rotation in the Code continue to be appropriate
- Non-assurance services - The IESBA will consider whether the code needs to be amended to include additional restrictions on auditors providing non-assurance services to their audit clients, e.g. whether "materiality" should be a consideration and whether such services should be pre-approved
- Structure of the Code - Considering how to increase the visibility of requirements and prohibitions and clarify who is responsible for meeting them
- Professional accountants in business - The IESBA will consider "whether recent accounting irregularities reveal ethical implications for professional accountants in business" which may require additional guidance to be included in the Code.
The Staff Paper notes the following:
The IESBA recognizes that by undertaking to determine its position on mandatory firm rotation, more extensive prohibitions on the provision of non-assurance services, and other measures being debated today that have independence implications, it will not be leading the debate on these topics. However, in order for the IESBA to properly exercise its authority as a global standard setter of ethics standards for accountants, the board has determined that it needs to set out its position on these matters.
Work on many of these additional workstreams are expected to commence during 2012.
Click for more information (link to IFAC website).