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Review of Part C of the Code

Review of Part C of the Code. Jim Gaa IESBA March 2013 New York, USA . Review of Part C of the Code. Section 340: Pressure by Superiors . Section 340 (“Financial Interests”) is too narrowly described includes non-financial pressures Pressure not limited to reporting

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Review of Part C of the Code

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  1. Review of Part C of the Code Jim Gaa IESBA March 2013 New York, USA

  2. Review of Part C of the Code Section 340: Pressure by Superiors • Section 340 (“Financial Interests”) is too narrowly described • includes non-financial pressures • Pressure not limited to reporting • Pressure is from corporate culture, bullying and threats of job loss. Not only personal financial gain • Will address imposing undue pressure on subordinates • Motivations in Section 340 should be expanded

  3. Review of Part C of the Code Section 320: Preparing and Reporting Information: • Currently only a brief mention of the PAIB’s responsibility. • A revised principle-based section: a more positive and fuller statement of the responsibility of PAIBs to prepare and report information that is a faithful representation of economic events and state of affairs, and threats and safeguards.

  4. Review of Part C of the Code Section 320: Preparing and Reporting Information • Clarify the intent of the requirement that information be prepared or presented fairly and honestly (in addition to be in accordance with professional standards); and • Guidance relating to earnings management • Guidance on non-GAAP reports (pro forma, budgets, forecasts, etc.) • Need to build on, but not overlap with, the work of financial reporting standard setters.

  5. Review of Part C of the Code Section 350: Facilitation payments and bribes • Section 350 is focussed on receiving offers. Increase the emphasis on making offers to align more closely with practical challenges faced by PAIBs. • Consider whether additional guidance that recognizes the diversity of cultures would be helpful to PAIBs working across different cultures and jurisdictions.

  6. Review of Part C of the Code Application of Part C to all Professional Accountants • Code states that Part C may be relevant to all professional accountants. • New issue, not supported by current Code • Definition of PAIB needs to capture all professional accountants (as employees of “employing organizations”) • Reconsider definition of PAIB and title of Part C.

  7. Review of Part C of the Code Summary • Phase one: sections • 300 (Introduction) , 320 (reporting responsibilities), 340 (pressure) • Phase two: section • 350 (gifts and inducements) • Other sections • 310 – (conflict of interest) new standard has been approved • 330 – (acting with sufficient expertise) will be examined; no changes? • 360 – (reporting suspected illegal acts) exposure draft comments received

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