Revised definition of 'network firm' in IFAC ethics code

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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.

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