IAASB Proposes Narrow Scope Amendments to Operationalize Changes to the IESBA Code that enhance Transparency about Independence

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Jul 06, 2022

On July 6, 2022, the In­ter­na­tional Au­dit As­sur­ance and Stan­dards Board (IAASB) released proposed narrow scope amendments to ISA 700 (Revised), Forming an Opinion and Reporting on Financial Statements and ISA 260 (Revised), Communication with Those Charged with Governance. The proposed amendments will help operationalize recently approved changes to the International Ethics Standards Board for Accountants’ (IESBA) International Code of Ethics for Professional Accountants (including International Independence Standards) related to listed and public interest entities. The changes to the IESBA Code require firms to publicly disclose when the independence requirements for public interest entities have been applied in an audit of financial statements.

This Exposure Draft is part of a broader IAASB project that responds to recent revisions to the IESBA Code related to listed and public interest entities, which are undertaken as two tracks—this is Track 1. Other narrow-scope amendments that may be considered in Track 2, on a separate timeline and with a later effective date, include:

  • Aligning to the greatest extent possible the definitions and key concepts underlying the definitions in the International Standards on Quality Management (ISQMs) and International Standards on Auditing (ISAs) related to listed and public interest entities to IESBA’s definitions and key concepts in the revisions to the IESBA Code; and
  • Considering the applicability of existing differential requirements for listed entities in the ISQMs and ISAs, and whether these need to be amended in light of IESBA’s revisions that address the definitions of “publicly traded entity” and public interest entities.

Comments are requested by October 4, 2022.

Re­view the press re­lease on the IAASB's web­site.

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