Both webinars provided an overview of the exposure draft and opportunities for stakeholders to participate in a questions and answers session with the presenters. 

• Click here for the April 11 Webinar: presented by Ms. Caroline Lee, IESBA Deputy Chair and Chair of the IESBA’s Engagement Team – Group Audits Independence (ET-GA) Task Force, and Ms. Denise Canavan, former IESBA Technical Advisor and member of the ET-GA Task Force
• Click here for the April 19 Webinar: presented by Ms. Caroline Lee and Mr. Andrew Pinkney, IESBA Technical Advisor and member of the ET-GA Task Force

The proposals in the Exposure Draft establish provisions that comprehensively address independence considerations for firms and individuals involved in an engagement to perform an audit of group financial statements. The proposals also address the independence implications of the change in the definition of an engagement team―a concept central to an audit of financial statements―in the International Auditing and Assurance Standards Board's (IAASB) International Standard on Auditing (ISA) 220, Quality Management for an Audit of Financial Statements. The proposals were developed in close coordination with the IAASB's group audits and quality management projects.

Review the press release on the IESBA's website.

Review the press release and article on the IESBA's website.

Review the article.

Review the article

To recognize diversity in jurisdictional contexts, the IESBA has taken a novel approach of expanding the PIE definition globally at a high level while providing guidance to regulators, national standard setters and other relevant local bodies on tailoring the broad definition for jurisdictional specificities. Among other matters, the revisions also:

• Articulate an overarching objective for additional independence requirements for audits of financial statements of PIEs.
• Provide guidance on factors to consider when determining the level of public interest in an entity.
• Replace the term “listed entity” with a new term “publicly traded entity,” providing a definition of the latter term.
• Recognize the essential role local bodies responsible for the adoption of the Code play in delineating the specific entities that should be scoped in as PIEs in their jurisdictions, encouraging them to properly refine the PIE categories and adding any other categories relevant to their environments.
• Introduce a transparency requirement for firms to publicly disclose the application of independence requirements for PIEs where they have done so.

The IESBA coordinated the development of these revisions closely with the International Auditing and Assurance Standards Board (IAASB) given that some of the terms and concepts that were considered are common to both Boards’ standards. The IAASB is pursuing a project to consider a number of matters relevant to its standards arising from the finalization of the IESBA’s PIE provisions, including whether and how to address the transparency requirement noted above in the IAASB’s standards.

The revised PIE definition and related provisions become effective for audits of financial statements for periods beginning on or December 15, 2024. Early adoption is permitted and encouraged.

Review the press release and revised provisions on the IESBA's website.

Among other things, Section 3.4 of the budget calls on the investment industry and federally regulated financial institutions to support the “transition economy” on the path to net-zero emissions. Here’s an excerpt:

Climate Disclosures for Federally Regulated Institutions

• The federal government is committed to moving towards mandatory reporting of climate-related financial risks across a broad spectrum of the Canadian economy, based on the international Task Force on Climate-related Financial Disclosures (TCFD) framework.
• The Office of the Superintendent of Financial Institutions (OSFI) will consult federally regulated financial institutions on climate disclosure guidelines in 2022 and will require financial institutions to publish climate disclosures—aligned with the TCFD framework — using a phased approach, starting in 2024.
• OSFI will also expect financial institutions to collect and assess information on climate risks and emissions from their clients.
• As federally regulated banks and insurers play a prominent role in shaping Canada’s economy, OSFI guidance will have a significant impact on how Canadian businesses manage and report on climate-related risks and exposures.
• Separately, the government will move forward with requirements for disclosure of environmental, social, and governance (ESG) considerations, including climate-related risks, for federally regulated pension plans.

This move follows a proposal last fall by the Canadian Securities Administrators to require TCFD-aligned reporting by issuers. That particular proposal is still under consideration.

Review the federal budget and climate chapter on the Government of Canada's website and summary on the Corporate Counsel's website.

The Agenda items in­cluded:

• Emerging Issues and Outreach Committee (EIOC)
• Rollout of Revised Public Interest Entity (PIE) Definition
• IESBA-IFAC Collaboration in Relation to Adoption and Implementation of the Code
• Benchmarking International Independence Standards
• IESBA Strategy and Work Plan Survey
• Tax Planning & Related Services
• Technology Fact Finding and Thought Leadership
• Next Meeting

Re­view the high­lights sum­mary and pod­cast on the IESBA's web­site.

Watch the video on the AcSB's website.

In recent years, much public attention has focused on the topic of tax planning and related services, notwithstanding the legality of the tax mitigation schemes, structures or transactions to achieve desired tax outcomes. Questions have been raised regarding the ethical implications for integrity and professional behavior, among other fundamental ethics principles, when PAIBs are involved in developing or implementing tax strategies that are perceived as “aggressive,” or when PAPPs provide advice to their clients on such strategies. The issue is of such major public interest significance that it has been discussed on the G20 agenda.

In light of the public concerns, the IESBA committed in its Strategy and Work Plan 2019-2023 to understand and address the ethical implications of “aggressive tax planning” as it relates to the role of PAIBs and PAPPs. Following fact finding, the IESBA initiated a project aimed at developing a principles-based framework to guide PAIBs’ and PAPPs’ ethical conduct when providing tax planning services to their employing organizations and clients, respectively.

Review the press release on the IESBA's website.

The proposed revisions establish provisions that comprehensively address independence considerations for firms and individuals involved in an engagement to perform an audit of group financial statements. The proposals also address the independence implications of the change in the definition of an engagement team―a concept central to an audit of financial statements―in the International Auditing and Assurance Standards Board’s (IAASB) International Standard on Auditing (ISA) 220, Quality Management for an Audit of Financial Statements.

Among other matters, the proposals:

• Establish new defined terms and revise a number of existing terms, including for application with respect to independence in a group audit context.
• Clarify and enhance the independence principles that apply to:
  • Individuals involved in a group audit.
  • Firms engaged in the group audit, including firms within and outside the group auditor firm’s network.
• More explicitly set out the process to address a breach of an independence provision at a component auditor firm, including reinforcing the need for appropriate communication between the relevant parties and with those charged with governance of the group.
• Align a number of provisions in the Code to conform to changes in the IAASB’s Quality Management standards.

Review the press release and proposed revisions on the IESBA's website.