Don Thomson, Task Force Chair IESBA Meeting New York July 7-9, 2014 Structure of the Code Don Thomson, Task Force Chair IESBA Meeting New York July 7-9, 2014
Recent developments Project proposal approved Additional input received National Standards-Setters Forum of Firms and SMP Committee Consultation Paper drafted, with examples Matters arising from review noted for Board
Topics for Discussion Various matters brought to the Board's attention (Informing the Board; discuss in this segment of the meeting only to the extent relevant to the deliverables or timeline of this project) Draft Consultation Paper – discuss structure and content Illustrative examples (financial interests later) (In addition to input provided at the Board meeting, please provide any drafting suggestions to the TF afterwards; suggestions for financial interests are also welcome; line-by-line TF review at next TF meeting)
General principles Concordance (5-D) – where to; where from No weakening – no requirements deleted No change in the meaning of the standards Unless appears warranted; Board agrees appropriate Inform Board (5-A) – address now or in future Unclear; gaps; inconsistencies; changes suggested; etc
Safeguards & responsibility (5-A# B,C) Some regulators have expressed concern Substantive changes beyond scope of this project A safeguards project may have pervasive impact Consider project with sufficient work to assess timetable/alignment Be mindful of the desire for timely restructuring Firm policies & procedures to clarify responsibility Further TF consideration; Consultation Paper will solicit input
Other matters (5-A #D to G) PA in PP includes firm – consider stating PA or firm Issues re firms include definition, related firms, non-PAs in firms Definition of firm in Code differs from IAASB definition Firm and other definitions – within or outside scope? Drafting conventions – will use to clarify scope of project Separation of 290/291 – plan to retain separation
Other matters (5-A #H) Revised numbering system – more conducive to changes 100 is Part A 200 is Part B 200 to 280 300 is Part C 400 is Independence – audit and review engagements (s.290) 500 is Independence – other assurance engagements (s.291)
Other matters (5-A #I) “Professional accountant or firm” – a useful term? Extant 290.14 "generally" – meaning? develop examples? Revised 110.014 – apply to "PA" rather than "PA or firm"? Revised 110.021 (extant 100.18) – move to intro? Revised 400.001 – within scope? suggestions? Revised 420.004b (extant 290.126) – meaning change?
Consultation Paper Introduction Background Restructuring Responsibility Clarity 6. Electronic features & Re-organization 7. Issues re examples 8. Examples 9. Impact Analysis
Consultation Paper Introduction Background Restructuring Purpose of the project: improve usability of the Code Background Basis for the proposals Restructuring Purpose / Requirements / Explanatory material
Consultation Paper Responsibility Clarity of language Clarification; firm policies; no change in meaning Clarity of language Make Code easier to understand, where possible Electronic Features and Re-organization Improved navigability / filtering / linkages
Consultation Paper Issues related to examples e.g. gaps; inconsistencies; changes contemplated in requirements / guidance; whether address now / later Examples of restructured Code From Part A, Part B, Part B (290), Part B (291) Impact Analysis Stakeholders asked to provide input
CP – Illustrative Examples Foreword will provide an overview For all sections Purpose, requirements, explanatory material Clear language, defined terms identified s.200 introduces networks and network firms 400.13-.14 identify responsibility for firms
Forward timeline (tentative) Sep'14 – CAG – draft CP Oct'14 – IESBA – approve CP Jan'15 – IESBA – continue review of restructured Code Mar'15 – CAG – CP responses Apr'15 – IESBA – CP responses Jun-Jul'15 – IESBA – draft ED Sep'15 – CAG – draft ED Oct'15 – IESBA – approve ED Early 2017 – Finalize and issue a restructured Code Jan'18 – Code effective
Matters for IESBA Consideration Any Other Comments or Questions ?