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Future Expectations and the
Profession’s Response
Jim Sylph, Formerly Executive Director, Professional Standards, IFAC
July 30, 2014

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PUBLIC EXPECTATIONS

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Scandals

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Global Adoption of IESBA Code
Total # Asia/Oceania
Adopted 84 Australia, Bangladesh*, Brunei Darussalam,
Cambodia, Fiji, Hong Kong SAR, Japan, Kazakhstan,
Kyrgyzstan, Malaysia, Mongolia, Nepal, New Zealand,
Philippines, Russian Federation, South Korea, Sri
Lanka*, Uzbekistan
Committed to Adopt 14 India, Pakistan,* Papua New Guinea, Singapore,
Sri Lanka*
Based on IESBA Code 15 China (mainland), Pakistan,* Vietnam
Process of Convergence 19 Bangladesh,* Indonesia, Sri Lanka,* Taiwan, Thailand
* Country has more than one professional body at
different stages of convergence
• Member of G-20

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IESBA Code
• Both Auditors & PAIBs
• Highlights from Current Work
Program
• Part C
• Long Association
• Non-Assurance Services
• Strategy & Work Plan
• Structure of the Code
• NOCLAR

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Part C of the Code
• Addressing three priority issues with respect to Professional
Accountants In Business (PAIBs)
– Pressure by superiors and others to engage in unethical or illegal acts
– Responsibility of PAIBs to produce financial reports that are faithful
representations of the economics of transactions
– Facilitation payments and bribes
• Exposure Draft up for approval in January 2015

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Long Association
• Cooling–off period for key audit partners (KAPs) on PIE audits:
– 5-year cooling-off for Engagement Partners (EP); 2 years for all other KAPs
– If EP for only part of 7-year time-on period, cool-off for 5 years at end of the 7
years
• Permissible activities during cooling off:
– EP permitted to be consulted on technical or industry-specific issues after 2
years cooling-off if on matters not previously considered by EP
– Other roles or activities prohibited if could influence audit outcome
– Provision of other services permitted if no significant/frequent interaction with
TCWG/no significant influence on the audit outcome exerted
• Exposure Draft Approved July 2014

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Non-Assurance Services (NAS)
• Exposure Draft approved April 2014
• Key proposals
– Withdrawal of emergency exception provisions re bookkeeping and tax
services
– Clarifications to provisions addressing management responsibilities
– Clarification of concept of “routine and mechanical” re bookkeeping
services
• Anticipated final approval: Q1 2015

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Strategy and Work Plan 2014-2018
• Approved in July 2014
• Support for the four work streams added to agenda in 2012
– Long Association, Non-Assurance Services, Structure of Code, Part C
• Strong support for proposed multi-pronged strategy
– Maintaining a high-quality Code
– Promoting and facilitating adoption and implementation
– Maintain the Code’s continued relevance in changing global
environment
– Increasing engagement and cooperation with key stakeholders

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Structure of the Code
• Review of structure of the Code to enhance usability
– To spur increased adoption and more effective implementation
– To facilitate compliance and enforcement
• Considering how to facilitate compliance and enforcement
– Increasing visibility of requirements and prohibitions
– Clarifying who is responsible for meeting them
• Consultation paper Q4 2014; Exposure Draft Q4 2015

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Responding to Non-Compliance
with Laws and Regulations (NOCLAR)
• Impetus for project
– Regulatory perception that confidentiality provisions in IESBA Code are
an impediment to whistle-blowing re non-compliance with laws and
regulations
• Key issue
– When should a PA override confidentiality and report non-compliance
to an appropriate authority?
• Balances acting in public interest vs. confidentiality principle
• Debate about disclosure of non-compliance is about what’s
reasonable to ask of PAs within their role in the public interest

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Responding to NOCLAR
• Main August 2012 Exposure Draft proposal: Requirement for auditor
to disclose to an appropriate authority
• Significant push-back from respondents
• Board considering alternative approach based on a right for
accountants to override confidentiality and report to appropriate
authority
• Three roundtables in 2014: Hong Kong (May 20), Brussels (June 13)
and Washington, DC (July 10)
• Expected completion Q1 2016

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