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Structure of the Code

Structure of the Code. Don Thomson, Task Force Chair IESBA Meeting New York July 7-9, 2014. Recent developments. Project proposal approved A dditional input received National Standards-Setters Forum of Firms and SMP Committee Consultation Paper drafted, with examples

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Structure of the Code

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  1. Structure of the Code Don Thomson, Task Force Chair IESBA Meeting New York July 7-9, 2014

  2. Recent developments • Project proposal approved • Additional input received • National Standards-Setters • Forum of Firms and SMP Committee • Consultation Paper drafted, with examples • Matters arising from review noted for Board

  3. Topics for Discussion • Various matters brought to the Board's attention (Informing the Board; discuss in this segment of the meeting only to the extent relevant to the deliverables or timeline of this project) • Draft Consultation Paper – discuss structure and content • Illustrative examples (financial interests later) (In addition to input provided at the Board meeting, please provide any drafting suggestions to the TF afterwards; suggestions for financial interests are also welcome; line-by-line TF review at next TF meeting)

  4. General principles • Concordance (5-D) – where to; where from • No weakening – no requirements deleted • No change in the meaning of the standards • Unless appears warranted; Board agrees appropriate • Inform Board (5-A) – address now or in future • Unclear; gaps; inconsistencies; changes suggested; etc

  5. Safeguards & responsibility (5-A# B,C) • Some regulators have expressed concern • Substantive changes beyond scope of this project • A safeguards project may have pervasive impact • Consider project with sufficient work to assess timetable/alignment • Be mindful of the desire for timely restructuring • Firm policies & procedures to clarify responsibility • Further TF consideration; Consultation Paper will solicit input

  6. Other matters (5-A #D to G) • PA in PP includes firm – consider stating PA or firm • Issues re firms include definition, related firms, non-PAs in firms • Definition of firm in Code differs from IAASB definition • Firm and other definitions – within or outside scope? • Drafting conventions – will use to clarify scope of project • Separation of 290/291 – plan to retain separation

  7. Other matters (5-A #H) • Revised numbering system – more conducive to changes • 100 is Part A • 200 is Part B 200 to 280 • 300 is Part C • 400 is Independence – audit and review engagements (s.290) • 500 is Independence – other assurance engagements (s.291)

  8. Other matters (5-A #I) • “Professional accountant or firm” – a useful term? • Extant 290.14 "generally"– meaning? develop examples? • Revised 110.014 – apply to "PA" rather than "PA or firm"? • Revised 110.021 (extant 100.18) – move to intro? • Revised 400.001 – within scope? suggestions? • Revised 420.004b (extant 290.126) – meaning change?

  9. Consultation Paper • Introduction • Background • Restructuring • Responsibility • Clarity 6. Electronic features & Re-organization 7. Issues re examples 8. Examples 9. Impact Analysis

  10. Consultation Paper • Introduction • Purpose of the project: improve usability of the Code • Background • Basis for the proposals • Restructuring • Purpose / Requirements / Explanatory material

  11. Consultation Paper • Responsibility • Clarification; firm policies; no change in meaning • Clarity of language • Make Code easier to understand, where possible • Electronic Features and Re-organization • Improved navigability / filtering / linkages

  12. Consultation Paper • Issues related to examples • e.g. gaps; inconsistencies; changes contemplated in requirements / guidance; whether address now / later • Examples of restructured Code • From Part A, Part B, Part B (290), Part B (291) • Impact Analysis • Stakeholders asked to provide input

  13. CP – Illustrative Examples • Foreword will provide an overview • For all sections • Purpose, requirements, explanatory material • Clear language, defined terms identified • s.200 introduces networks and network firms • 400.13-.14 identify responsibility for firms

  14. Forward timeline (tentative) • Jun-Jul'15 – IESBA – draft ED • Sep'15 – CAG – draft ED • Oct'15 – IESBA – approve ED • Early 2017 – Finalize and issue a restructured Code • Jan'18 – Code effective • Sep'14 – CAG – draft CP • Oct'14 – IESBA – approve CP • Jan'15 – IESBA – continue review of restructured Code • Mar'15 – CAG – CP responses • Apr'15 – IESBA – CP responses

  15. Matters for IESBA Consideration Any Other Comments or Questions ?

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