IESBA CAG Meeting New York March 5, 2018 Strategy & Work Plan 2019-2023 Stavros Thomadakis, IESBA Chairman Ken Siong, Technical Director IESBA CAG Meeting New York March 5, 2018

Context and Environmental Factors Revised and restructured Code at end of current planning horizon Rapid spread of digital technologies, “data economy,” more liquid workforce Continuing regulatory pressure: Steer Code to meet needs of developed markets and audit inspection authorities Timely standard setting Heightened stakeholder expectations re SSB coordination

SWP Survey Results – CAG and Board Discussions CAG broadly aligned with PC analysis re top 6 standard-setting priorities Board also broadly supportive of PC analysis but… Post-implem. review re restructured Code important E-Code and implementation central to future strategy Need robust outreach strategy re adoption of restructured Code Focus on success factors in 2023, esp. relevance, quality and global adoption Maintain some reserve capacity to address emerging issues

Proposed Vision for the Code Strategic Orientation for 2019-2023 Proposed Vision for the Code A Code that lays a foundation of strong ethical principles, values and standards to underpin trust in the global accountancy profession in a dynamic world, and to enable it to act in the public interest.

Proposed Strategic Themes Strategic Orientation for 2019-2023 Proposed Strategic Themes Maintaining a global Code that is relevant and fit for purpose Raising the ethical bar through further strengthening the Code Raising the ethical bar through increasing global adoption and effective implementation of the Code Proactively engaging and seeking cooperative avenues with key stakeholders

Matter for CAG Consideration Strategic Orientation for 2019-2023 Matter for CAG Consideration Views on proposed strategic themes?

Criteria Influencing Development of Work Plan Developing the Work Plan Criteria Influencing Development of Work Plan Benefits to public interest Further enhance public trust in the Code and profession Further raise ethical bar by supporting public interest outcomes Pervasiveness of the matter Degree of urgency Global relevance Feasibility within realistic timeframes

Managing Delivery of SWP Developing the Work Plan Managing Delivery of SWP Key focus areas Independence of IESBA and strength of its reputation, and global acceptance of the Code Capacity at leadership, volunteer and staff levels Operational effectiveness and stability Robust outreach and communication with stakeholders

Pre-commitments # Topic Scope Status 1. NAS Int’l Independence Standards Fact finding commenced 2. Fee-related matters Part 3 and IIS WG report expected Q2 2018 3. Professional skepticism Whole Code (PAPPs & PAIBs) Consultation paper Q2 2018 4. E-Code Whole Code Initial IESBA discussion Q1 2018 5. Part 4B consistency with ISAE 3000 IIS IESBA discussion Q2 2018 6. NOCLAR post-implem. review Fact finding to begin Q1 2022 7. Long association post-implem. review 8. IAASB-IESBA coordination Some topics under way

Clear Strategic Priorities Proposed Future Standard-setting Initiatives Clear Strategic Priorities Topic Scope Technology and innovation Whole Code (PAPPs & PAIBs) Models of service delivery Part 3 and IIS Tax planning and related services Whole Code

Proposed Future Standard-setting Initiatives Other Priorities Topic Scope Definitions of PIE and listed entity IIS Materiality Part 3 and IIS Post-implem. review restructured Code Whole Code Communication with TCWG Documentation

PIOB Communication of Public Interest Issues to IESBA PIOB Concerns Topic Scope Potential impact of fee levels on independence Share of firms’ revenue from consulting services increasing vs audit revenue Potential for fewer and lower quality resources for audit Sufficient concern among stakeholders to justify comprehensive project on fees in next strategy cycle Audit firms’ business model Audit firm business model can be seen as a barrier to real independence, to effective implementation of PS, and to audit quality Recommendation to consider issue in-depth in next strategy cycle

PIOB Communication of Public Interest Issues to IESBA PIOB Concerns Topic Scope Address significant ethical issues in public discourse in SWP PIOB view that IESBA needs to delve more deeply into public interest implications of aggressive tax planning Coordination among SSBs Extend collaboration among SSBs further Ensure SSB coordination operating effectively to increase coherence of standards

Some Key Considerations Proposed Future Standard-setting Initiatives Some Key Considerations How best to approach pervasive topic of technology? How best to address overlaps between topics? E.g., NAS & Fees Changes to the Code vs off-Code guidance? Consideration of thought pieces/discussion papers? Need for coordination with other SSBs?

Matters for CAG Consideration Developing the Work Plan Matters for CAG Consideration Views on : Proposed 2019-2023 Work Plan re content and timing? Specific identified priority actions?