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.

On February 18, 2022, the International Ethics Standards Board for Accountants (IESBA) released for public comment proposed revisions to the "International Code of Ethics for Professional Accountants (including International Independence Standards)".

On April 11, 2023, the IESBA released final revisions to the International Code of Ethics for Professional Accountants, including International Independence Standards (IIS), to further increase the Code’s robustness and expand its relevance in a world being fundamentally reshaped by rapid technological advancements and accelerating digitalization.

The revisions will guide the ethical mindset and behavior of professional accountants in both business and public practice as they take advantage of the opportunities created by technology and adapt to new technology. Developed to remain relevant and applicable in the ever-evolving landscape of technology transformation, the revisions apply to the use of any technology, including to the extent possible, future technologies.

The revisions, which were informed by extensive fact-finding and stakeholder outreach:

• Strengthen the Code in guiding the mindset and behavior of professional accountants when they use technology.
• Provide enhanced guidance fit for the digital age in relation to the fundamental principles of confidentiality, and professional competence and due care, as well as in dealing with circumstances of complexity.
• Strengthen and clarify the International Independence Standards (IIS) by addressing the circumstances in which firms and network firms may or may not provide a technology-related non-assurance service to an audit or assurance client.

The revisions to the IIS will be effective for audits and reviews of financial statements for periods beginning on or after December 15, 2024. The other revisions to the ethics provisions of the Code will be effective as of December 15, 2024. Early adoption is permitted.

Re­view the press re­lease, the final pronouncement and the basis for conclusions on the IESBA's web­site.

Other de­vel­op­ments

Technology-related Revisions to the Code – IESBA

November , 2022

At its meetings on November 29 – December 2 and December 15, 2022, the IESBA approved the proposed technology-related revisions to the Code. Subject to PIOB approval, the final pronouncement is expected to be released in April 2023. The ethics related provisions will be effective as of December 15, 2024. The independence-related provisions will be effective for audits of financial statements for periods beginning on or after December 15, 2024, with early adoption permitted.

September 12, 2022

The IESBA reviewed a full analysis of the significant comments received from respondents to the ED, and the Task Force’s proposed revisions to the text in the ED. Among other matters, the IESBA provided input on the Task Force’s proposals, including the addition of “interpersonal, communication and organizational skills” to the description of the fundamental principle of professional competence and due care to emphasize the professional skills that professional accountants need; the inclusion of an explicit prompt in the Code for professional accountants to secure confidential information in the entire data governance cycle; the guidance to highlight complexity as a factor when applying the conceptual framework; considerations to help professional accountants identify threats that might arise when they rely on the output from technology; the prohibition on firms to provide hosting services to audit clients; and the inclusion of an explicit prompt in the Code to remind firms to consider the relevance of the non-assurance services (NAS) provisions in Section 600 when technology is provided, sold, resold, or licensed by a firm or a network firm to an audit client. The IESBA will review a revised draft of the revisions to the ED at its November-December 2022 meeting with a view to final approval.

February 2022

On February 18, 2022, the IESBA released for public comment Proposed Technology-related Revisions to the International Code of Ethics for Professional Accountants (including International Independence Standards). Com­ments are re­quested by June 20, 2022.