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IESBA Proposed Changes to the Code of Ethics: Definitions of Listed Entity and PIE (Potential Amendments to Harmonized Rule of Professional Conduct, Rule 204) [Research]

Nest steps:

The IESBA will discuss initial matters for consideration re this project at its March 2020 meeting.

Last up­dated:

December 2019

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 3-6, 2019, the IESBA approved a project to review the definitions of the terms “listed entity” and “public interest entity” (PIE) in the Code, with the aim of revising them as necessary so that they remain relevant and fit for purpose.

The concept of a PIE overlaps with the concept of an “entity of significant public interest” (ESPI) in the standards of the International Auditing and Assurance Standards Board (IAASB) in some respects. Therefore, part of the project objectives is to develop a pathway that would achieve convergence between the two concepts to the greatest extent possible. The IESBA will coordinate this project closely with the IAASB.

As a first step in the project, given that the concept of a PIE is relevant to the non-assurance services provisions (NAS) in the Code, the IESBA is seeking early input from stakeholders through the NAS Exposure Draft on key considerations they believe should be taken into account in the project.

For fur­ther de­tails about this pro­ject, re­fer to the IESBA’s pro­ject sum­mary.

 

Recent de­vel­op­ments

December 2019

At its meeting on December 3-6, 2019, the IESBA approved this project to review the definitions of the terms “listed entity” and “public interest entity” (PIE) in the Code, with the aim of revising them as necessary so that they remain relevant and fit for purpose.

Correction list for hyphenation

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