Structure of the Code Phases 1 and 2 Don Thomson, Task Force Chair IESBA Meeting New York, USA December 15, 2015

Objectives and Approach Structure of the Code Objectives and Approach Structure Phase 1 Agreement-in-principle on text Input on basis for agreement-in-principle Structure Phase 2 Approval of exposure draft Input on explanatory memorandum

Structure of the Code Phase 1 – Agenda Item 3-B Supplement 1 3-B Supplement 1 (Phase 1) 400.50 A1 – introductory wording moved from 400.53 A1 R520.6 – reverted substantially to exposure draft wording Other changes – editorial and/or discussed on Monday Changes since Agenda Item 3-B Supplement 1 R510.8 – restored "a" and "b", with "and" between them Glossary, NOCLAR – PAIB and PAPP – restored parentheses Any significant matters not already discussed?

Structure of the Code Phase 1 – Agenda Item 3-B Supplement 1 3-B supplement 1 (Phase 1) 520.6 mark-up from exposure draft The firm, a network firm or an audit team member shall not have a close business relationship with an audit client or its management unless anythe financial interest is immaterial and the business relationship is insignificant to the client or its management and the firm, the network firm or the audit team member, as applicable. as the case may be, and the client or its management.

Highlights of Changes From ED 1 Structure of the Code Phase 1 Highlights of Changes From ED 1 Unintended changes of meaning Network firm, necessary adjustments made Guide to the Code No longer part of Code; some material moved back to Code Prominence of the fundamental principles and, in independence sections, need to be independent highlighted Linkage between independence and objectivity clarified

Agreement in Principle Phase 1 Structure of the Code Phase 1 Agreement in Principle Phase 1 All input received has been considered Any further matters for discussion? Agreement in principle Basis for agreement in principle (Agenda Item 3-G) Any comments on the preliminary draft wording?

Structure of the Code Phase 2 – Agenda Item 3-D Supplement 1 3-D Supplement (Phase 2) Changes – editorial and/or discussed on Monday All input received has been considered Any further matters for discussion? Approval of Phase 2 Exposure Draft

Explanatory Memorandum Structure of the Code Phase 2 – Agenda Item 3-H Explanatory Memorandum Page 5 – Background Page 6 – Key features Page 8 – Significant matters Page 10 – Project timetable Page 11 – Questions Accompanying Documentation Staff-prepared compilation/mapping table/IESBA Update 2017

Next Steps and Timetable Structure of the Code Next Steps and Timetable Jan 2017: Publish documents May 2017: ED responses due (120 day exposure) December 2017: Restructured Code approved Spring 2018: Anticipated PIOB approval June 15 2019: Effective date Other matters: Electronic Code and implementation