Experience with Adopting the Code CA Canada – Gary Hannaford AICPA US – Lisa Snyder ICAEW – Tony Bromell

Code uses the threats and safeguards (“T&S”)approach more extensively throughout; Rules only use T&S when dealing with independence –Rules approach based on same five fundamental principles as Code, but specific requirements are “rules” in relation to all five principles instead of being framed in terms of T&S CA Canada

Rules set out specifics of what “must” and what “cannot” be done - Explanatory language as to why something “must” or “cannot” be done is segregated in “Council Interpretations” (“CIs”) -CIs provide guidance on how Rule is applied; occasionally provide some “relief” from a Rule -Rules are what we enforce, so requirements are precise, not explanatory -Legal advice - combining precise requirement with interpretative language reduces strength of requirement CA Canada

Rules contain some specific detailed provisions not included in Code - But Code T&S approach may create the same result without specifically detailing a requirement –Examples – borrowing from clients, co-operation on client succession, reporting criminal offences, fee quotations CA Canada

Code is divided into 3 parts - general provisions, professional accountants in public practice, professional accountants in business Rules divided into 5 parts - general provisions, conduct affecting public interest, conduct between members in public accounting, organization of a professional practice, and firms (as opposed to members/students) CA Canada

Code applies to “professional accountants” Rules apply to “members”, “students” and “firms” (where permitted by legislation) CA Canada

Independence Update –Rules originally based (in 2003) on substance of Code for private enterprises and SEC for public interest entities –In adopting the recent changes to the independence provisions, regulators expressed concern that adopting Code would reduce rigour of existing SEC-based provisions for PIEs –Further complicated by process that requires approval of amendments by members in many individual Canadian jurisdictions CA Canada

Use IESBA verbatim apart from - Add-on sections (corporate finance, agencies and referrals, insolvency) - Add-ons to existing sections - Diversion of UK and Irish audits to APB material - Spelling - Links to other material ICAEW approach to adopting IESBA code of ethics

A few additional definitions (mostly scope of coverage but including ‘shall’) Additional discussion, largely from previous code (eg. the public interest, the fundamental principles, disclosure in the public interest, ethical conflict resolution) Additional requirements (eg. contacting existing accountant, communicating fee basis in writing, ‘accounting’ for commissions) Relevant legal commentaries (eg. qualified privilege, tipping off, fiduciary relationships) ICAEW add-ons to existing sections

s290/291 General issues with IESBA/ local requirement overlap Specific reformatting? Other sections General issues with any changes to IESBA code (own add-ons, process, links and website, publicity) Bringing in others on joint projects Specific reformatting? ICAEW issues with potential reformatting?