IESBA refines global audit provisions to increase public trust

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The IESBA (the International Ethics Standards Board for Accountants AKA the Ethics Board) has announced changes to the Code Addressing Certain Non-Assurance Services Provisions for Audit and Assurance Clients.
The changes improve the current independence provisions in the Code of Ethics for Professional Accountants (the Code) by specifically, no longer permitting auditors to provide any forbidden services to public interest entity (PIE) audit clients in emergency situations, to ensure that they do not assume responsibility when providing non-assurance audit services to customers.

The revisions include the removal of provisions that permitted an audit firm to provide certain bookkeeping and taxation services to PIE audit clients in emergency situations, as these were susceptible to being interpreted too generally. In addition, the revised provisions include:

Newly refined guidance about what management responsibility means.
Clearer guidance about the notion of “routine or mechanical” services relating to the preparation of accounting records and financial statements for audit clients that are not PIEs.
Corresponding amendments to the Code’s non-assurance services provisions with respect to other assurance clients.
Dr Stavros Thomadakis, the IESBA Chairman made a statement: ‘Auditor independence is essential to public trust regarding external auditing. The developments will not only reinforce independence but also encourage better consistency of the Code’s application in the many jurisdictions (over 100) globally where the code is being successfully used.’

The changes will be effective in April next year. To see the announcement in full, visit the IESBA website: www.ethicsboard.org.