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.