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Proposed amended requirements for breaches of the Code of Ethics for Professional Accountants

  • IESBA (International Ethics Standards Board for Accountants) (lt gray) Image

25 Oct 2011

The International Ethics Standards Board for Accountants (IESBA) has released for comment 'Proposed Changes to the Code of Ethics for Professional Accountants Related to Provisions Addressing a Breach of a Requirement of the Code'.

The proposals result from a project the IESBA agreed to undertake in response to a letter submitted to the IESBA by the International Organization of Securities Commissions (IOSCO) in response to an IESBA Exposure Draft issued in July 2008, which proposed new drafting conventions for the Code of Ethics for Professional Accountants (the Code).

The exposure draft proposes:

  • to introduce a modified requirement that a professional accountant take whatever actions that might be available as soon as possible to satisfactorily address the consequences of a breach of a provision of the Code and to determine whether to report the breach to those who may have been affected by the breach
  • in relation to independence requirements for audits, to require a firm to determine whether termination of the audit engagement is necessary or whether action can be taken to satisfactorily address the consequences of a breach such that the firm can still issue an audit opinion
  • to require documentation of all identified breaches, the actions taken with respect to the breaches, and all matters discussed with those charged with governance and, if applicable, with relevant regulators.

The IESBA proposes that the changes be effective for breaches identified on and after 1 January 2013.

The Consultation Paper is open for public comment until 23 January 2012. Click for IESBA press release (link to IFAC website).

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