Page 1 Structure of the Code Don Thomson Working Group Chair IESBA Member IESBA Meeting December 4-6, 2013 New York
Page 2 Prior years – Concerns expressed May - October 2013– Research supports change – CAG & NSS input received September 2013– Findings December 2013– Recommendations Background
Page 3 Recommendations: Distinguish requirements from guidance –enhance understandability & enforceability Confirm: conceptual framework is a requirement Guidance adjacent to relevant requirements Distinguishing requirements
Page 4 Recommendations: Firms' policies & procedures shall enable identification of the individual responsible for independence in a particular circumstance Change passive clauses to active where the change would not change the meaning Responsibility of individuals
Page 5 Recommendations: Reduce the reading age Extend drafting conventions Avoid stock phrases & linguistic nuances Use more sub-headings Use an editor Consider translatability of changes Clarity of language
Page 6 Recommendations: Coordinate changes with other recommendations Filter content by: user / service / client Enhance search functionality Develop hyperlinks Improve navigation Electronic Code
Page 7 Recommendations: Coordinate changes with electronic Code Separate independence Rebrand independence –International Standards on Independence Repackaging
Page 8 Recommendations: Work with others to develop materials Examples: –Short summaries, FAQs and case studies –Bases for conclusions Address these after restructuring the Code Complementary Materials
Page 9 Three segments of Section 290 reworked Stage one of a process to explore the practical challenges of addressing visibility & responsibility These are not proposals Presented to obtain IESBA views on 7 questions Restructuring example (2-C)
Page 10 Would changes (IN BOLD) prescribing specific responsibility make the Code more enforceable? Any comments on the changes (IN BOLD) where rewording may change the meaning of the Code? Are direct statements (audit may not be performed unless….) clearer than passive statements? Restructuring example (2-C)
Page 11 Do changes so far enhance clarity of language? Any comments on the order of the requirements? –e.g. Whether “threats” should precede or follow matters “specifically not permitted” Is “compliance with conceptual framework” language too broad or not broad enough? Do “purpose” paragraphs assist as introductions? Restructuring example (2-C)
Page 12 Any other questions arising from this approach? Does the IESBA support further work on the application of the recommendations to Section 290? –Separating requirements from guidance –Strengthening Restructuring example (2-C)
Page 13 Comments or Questions? Other matters