Overview

On July 19, 2018, the International Ethics Standards Board for Accountants (IESBA) released new enhancements to its global ethics code which address more fully the responsibilities of professional accountants around the offering and accepting of inducements.

The revised standard sets out a comprehensive framework that more clearly delineates the boundaries of acceptable inducements, and guides the behavior and actions of professional accountants in business and in public practice in situations involving inducements.

Central to this framework is a new intent test that prohibits the offering or accepting of inducements where there is actual or perceived intent to improperly influence the behavior of the recipient or of another individual. The framework also:

• Clarifies the meaning of an inducement;
• Establishes a requirement to understand and comply with laws and regulations that prohibit the offering or accepting of inducements in certain circumstances, such as in relation to bribery and corruption;
• Guides professional accountants in applying the enhanced conceptual framework underpinning the International Code of Ethics for Professional Accountants (including International Independence Standards) where there is no improper intent; and
• Provides enhanced guidance on the offering and accepting of inducements by professional accountants’ immediate or close family members.

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

Other developments

July 2018

On July 19, 2018, the International Ethics Standards Board for Accountants (IESBA) released new enhancements to its global ethics code which address more fully the responsibilities of professional accountants around the offering and accepting of inducements.

September 2017

On September 8, 2017, the International Ethics Standards Board for Accountants (IESBA) released for public comment the Exposure Draft, "Proposed Revisions to the Code Pertaining to the Offering and Accepting of Inducements." Comments on the Exposure Draft are due by December 8, 2017.

Related discussions

Offering and Accepting of Inducements - IESBA

March 12, 2018

• At its meeting on March 12-14, 2018, the IESBA considered the significant comments received on the September 2017 Exposure Draft and the Task Force’s related responses and proposed revisions to the Code. Topics discussed included: the definition of an inducement, the concept of improperly influencing behavior, the approach to inducements that are trivial and inconsequential where there is improper intent, relevant factors when considering intent and evaluating the level of threats, the offer of inducements by or to immediate or close family members, and the interaction between Section 340 and Sections 420 and 906. The IESBA will consider a final draft of the inducement provisions with a view to approving them as a final pronouncement at a teleconference scheduled for April 23, 2018

Offering and Accepting of Inducements – IESBA

Jun 19, 2017

• At its meet­ing on June 19-21, 2017, the IESBA approved for exposure proposed Section 250, Gifts, Hospitality and Other Inducements together with proposed conforming amendments to (a) Section 340, Gifts, Hospitality and Other Inducements, and (b) independence standards in Sections 420 and 906 of the restructured Code addressing gifts and hospitality.