IAASB-IESBA Coordination Sylvie Soulier, IAASB-IESBA Coordination Liaison IESBA Meeting, Athens Greece June 18-20, 2018

Objective To receive an update on the status of IAASB-IESBA coordination activities

What is Coordination? Coordination is a process of organizing SSBs’ resources and activities so that their standards and initiatives collectively achieve outcomes that are in the public interest Coordination should occur when: There is an actual or perceived degree of overlap of issues An SSB’s action might result in potentially serious implications to another SSB’s standards Need for an awareness and understanding of implications of potential changes by one SSB on another SSB’s standards (e.g., for changes in terminology)

Increasing Need for Coordination Release of revised and restructured Code require review of IAASB’s standards to ensure continued alignment Strategically important given increased overlapping audit- ethics issues and connections CAG, PIOB, MG and other stakeholders encourage further consideration of opportunities for SSB coordination

Coordination Activities Since March 2018 May 2018 IESBA receives webcast from IAASB Quality Control (ISQC 1, ISQC 2 and ISA 220) Agreed-Upon Procedures Presentation now available on IESBA’s website Routine interactions at Working Group and Staff level Professional Skepticism Alignment of Part 4B with ISAE 3000 (Revised)

Changes to ISQC 1 timeline being explored Approval for ED exposure may be extended to December 2018 IESBA representatives and Staff review Overlapping issues identified Significant comments shared with QC Task Force Chair and IAASB Staff, which are currently being considered Timeline for future interactions to be agreed Note to Sylvie - Consider asking Ken to offer some remarks about the process that has been established for coordination Before the meeting – Ken will brief you and rest of PC of what was agreed Dan and Natalie for coordination Let’s discuss with Ken and Stavros/ PC about the need for additional IESBA member to assist with review and coordination efforts for ISQC 1.

Nature of Comments Raised on ISQC 1 Matters due to release of revised and restructured Code Increased prominence given to the need to comply with FPs in addition to independence provisions Clarification about responsibilities for independence and breaches Consistency matters Network firms Client acceptance and continuance Culture vs FPs “Acting in the public interest involves applying professional values, ethics and attitudes in making decisions that promote a commitment to quality …” Reference to description of RITP and the general req’ts for addressing threats Note to Sylvie -Consistency matters are terms or concepts that are defined or described in the Code, but referred to in a different way in ISQC 1, or in a manner that IESBA representatives believe might create confusion or inconsistent application - Mention that tone/ presentation matters are suggestions to enhance the draft of proposed ISQC 1 from an ethics/independence perspective, but it is up to QC to decide whether to take them on

Joint WG to resume work in July/ August ISQC 2 Joint WG to resume work in July/ August Questions about objectivity of EQCRs, in particular when previously functioned as EP Are principles-based provisions in Code sufficient? Are more specific examples needed to assist EQCRs evaluate and address threats to their objectivity? Should Code specify a “cool off period” for EPs stepping into an EQCR role?

Potential agenda topics Joint SSB Sept 2018 Session Potential agenda topics ISQC 1: Brief SSBs on overlapping issues identified and how they are being addressed ISQC 2: Issues and Joint WG’s recommendations Joint technology session Opportunities for coordination re future strategies and work plans

Matters for Consideration IESBA members are asked to: Consider the presentation and share their reactions Provide any comments on the QC Task Force’s revisions to the ISQC 1 March 2018 draft (i.e., Agenda Items 6-A and 6-B)

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