Overview

Har­mo­nized provin­cial Rule 204 sets out the Cana­dian pro­fes­sion’s stan­dards that en­sure Char­tered Pro­fes­sional Ac­coun­tants (CPAs) main­tain au­di­tor in­de­pen­dence dur­ing en­gage­ments they un­der­take or par­tic­i­pate in. It sets the stan­dards and re­quire­ments CPAs must main­tain as part of their pro­fes­sional con­duct. Ethics stan­dards adopted by Cana­dian provin­cial bod­ies are cre­ated in align­ment with the Code of Ethics for Pro­fes­sional Ac­coun­tants is­sued by the In­ter­na­tional Ethics Stan­dards Board for Ac­coun­tants (IESBA).  Hence, changes to the IESBA Code of Ethics will need to be re­flected in Rule 204.

At its meeting on December 4-8, 2017, the IESBA approved the final text of the restructured Code, including: (i) structural and drafting enhancements developed under the Structure of the Code project; (ii) revisions to the provisions pertaining to safeguards in the Code, developed under the Safeguards project; (iii) revisions to clarify the applicability of the provisions in Part C of the extant Code to professional accountants in public practice, developed under the Applicability project; and (iv) new application material relating to professional skepticism and professional judgment, developed under the Professional Skepticism (short-term) project.

On April 9, 2018, the IESBA issued its restructured Code of Conduct [renamed the International Code of Ethics for Professional Accountants (including International Independence Standards)], which in­cludes the re­vi­sions relating to this project. Review the press release, the new Code and the related resource page on the IESBA's website.

With the exception of the revised provisions pertaining to the long association of firm personnel with an audit or assurance client: Parts 1, 2 and 3 of the restructured Code will be effective as of June 15, 2019; Part 4A relating to independence for audit and review engagements will be effective for audits and reviews of financial statements for periods beginning on or after June 15, 2019; and Part 4B relating to independence for assurance engagements with respect to subject matter covering periods of time will be effective for periods beginning on or after June 15, 2019; otherwise, it will be effective as of June 15, 2019.

With respect to the revised Long Association provisions, the IESBA agreed to modify the effective date for the revised provisions relating to assurance engagements in extant Section 291. For assurance engagements covering periods of time, these provisions will be effective for periods beginning on or after December 15, 2018; otherwise, they will be effective as of December 15, 2018. The effective date for the revised Long Association provisions in extant Section 290 remains unchanged, i.e., these provisions are effective for audits of financial statements for periods beginning on or after December 15, 2018. The effective date of the restructured Code does not override the effective date of the revised Long Association provisions.

Other de­vel­op­ments

April 2018

On April 9, 2018, the IESBA issued its restructured Code of Conduct (renamed the International Code of Ethics for Professional Accountants (including International Independence Standards)), which includes the revisions relating to this project.

December 2015

On December 21, 2015, the IESBA is­sued an Ex­po­sure Draft, Im­prov­ing the Struc­ture of the Code of Ethics for Pro­fes­sional Ac­coun­tants—Phase 1. Com­ments were due by April 16, 2016. See press release and related attachments.

Jan­u­ary 2017

On Jan­u­ary 24, 2017, the IESAB is­sued an Ex­po­sure Draft, Im­prov­ing the Struc­ture of the Code of Ethics for Pro­fes­sional Ac­coun­tants—Phase 2. Com­ments were due by May 25, 2017. See press release and related documents.

Related Discussions

Struc­ture of the Code - IESBA

Dec 4, 2017

At its meet­ing on December 4-8, 2017, the IESBA approved the final text of the restructured Code, including: (i) Structural and drafting enhancements developed under the Structure of the Code project; (ii) revisions to the provisions pertaining to safeguards in the Code, developed under the Safeguards project; (iii) revisions to clarify the applicability of the provisions in Part C of the extant Code to professional accountants in public practice, developed under the Applicability project; and (iv) new application material relating to professional skepticism and professional judgment, developed under the Professional Skepticism (short-term) project. Subject to the Public Interest Oversight Board (PIOB) approval, the restructured Code is expected to be released by early April 2018. The text of the restructured Code submitted to PIOB for approval will be made available on the IESBA website by the end of January 2018 together with supporting tracking documentation to facilitate early implementation activities.

Structure of the Code - IESBA

Sept 19, 2017

• At its meeting on September 19-22, 2017, the IESBA further deliberated significant comments received on Structure ED-2. As part of its deliberation, the IESBA considered a first draft of revisions to the proposed text included in Structure ED-2 and consistency refinements to the agreed-in-principle text of Phase 1. Topics discussed included: the usage of the terms “may” and “might” and their descriptions in the restructured Code; distinguishing between “firm” versus “network firm,” primarily in the International Independence Standards; and the proposed effective date. The IESBA broadly supported the direction of the Structure Task Force’s proposals. The IESBA asked that the Task Force continue to liaise with the Safeguards Task Force to undertake a consistency review of the proposed texts to be included in the restructured Code before the next meeting. At its December 2017 meeting, the IESBA will consider the final drafts of the texts of Phases 1 and 2 of the restructured Code, with a view to approval.
  
  

Dec 12, 2016

• At its meeting on December 12-15, 2016, the IESBA approved for exposure the text of Phase 2 of the project (Structure ED-2) incorporating restructured provisions for the remaining parts of extant Part B, Professional Accountants in Public Practice, not previously included in ED-1.