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Revised definition of 'network firm' in IFAC ethics code

  • IFAC (International Federation of Accountants) (lt gray) Image

01 Aug 2006

IFAC's International Ethics Standards Board for Accountants (IESBA) has revised the Code of Ethics for Professional Accountants by updating the definition of a network firm.

Network firms are required to be independent of an audit client of another firm within the network. Under the revised definition, a network firm is a firm or entity that belongs to a network. A firm can be a sole practitioner, partnership, or corporation of professional accountants or an entity that controls or is controlled by such parties. A network is a larger structure:
  • that is aimed at co-operation, and
  • that is clearly aimed at profit or cost sharing or shares common ownership, control or management, common quality control policies and procedures, common business strategy, the use of a common brand-name, or a significant part of professional resources.
The revised definition is effective for assurance reports dated on or after 31 December 2008. Click for the IFAC Press Release (PDF 79k), which includes a link to download the revisions.

Correction list for hyphenation

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