enhanced global ethics - nasba federation of accountants enhanced global ethics ken dakdduk, chair -...
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International Federation of Accountants
Enhanced Global Ethics
Ken Dakdduk, Chair - IESBA
NASBA International Forum
Madrid, Spain
September 30, 2010 1
IESBA Code of Professional Ethics
2 1
IESBA Code of Professional Ethics
3 2
• New guidance applicable when audit client is a PIE
– Partner rotation and cooling off period required for key audit partners (KAP)
– Restrictions on non-audit services (tax, corporate finance, valuations, bookkeeping, internal audit, IT, recruiting)
– Significant fees from the audit client requires pre- or post-issuance review of the audit
• Other restrictions apply to PIEs and non-PIEs
– KAPs cannot be evaluated on or compensated for selling non-assurance services to the partner’s audit client
IESBA Code of Professional Ethics
4 3
IESBA Code of Professional Ethics
5 4
• Revised Code effective January 1, 2011
– One-year delayed effective date applies for PIEs
• Q&As to be issued
– Conceptual framework does not override prohibitions
– Tax partner generally would not be a KAP
– Just because something is not prohibited doesn’t mean it is permitted
IESBA Code of Professional Ethics
6 5
• Exposed for comment March 2010 to June 15, 2010 – 37 response letters received
• Respondents supportive of: – Planned 2-year “quiet period”
– Practical guidance instead of new requirements
– Planned adoption and implementation efforts
– Conflicts of interest
– Responding to suspected fraud and illegal acts
– International convergence efforts
IESBA 2010-2012 Work Plan
7 6
Adoption and Implementation
8 7
Conflicts of Interest
9 8
Suspected Fraud and Illegal Acts
10 9
• IESBA will be asked to undertake a project to reconsider inadvertent violation provisions – Purpose and scope
– Definition
– Magnitude
– Quality controls
– Safeguards
– Documentation
– Discussion with those charged with governance
Other projects
11 10
• Related entity definition in audits of mutual funds
– Ranked as high priority; several respondents disagreed
• Non-assurance services to non-assurance clients
– Ranked as lower priority; a few respondents disagreed
• Accountants not in public practice issuing assurance reports
– Ranked as lower priority; a few respondents disagreed
Other projects
12 11
• SMP/SMEs
– Focus on unique issues
– Will recommend board begin a project
• Mechanism to deal with urgent issues
– Consider a vehicle that can enable quick response to address ad hoc issues
Other projects
13 12
International Convergence
14 13
• Explore greater use of Code in group audit situations
– Whether Code could be recognized by parent company auditor for use by subsidiary auditor
– Determine how best to facilitate this
– Discuss with national standard setters/regulators
International Convergence
15 14
Questions
16 15 1