1. IESBA Meeting Livingstone, Zambia December 4-8, 2017
SWP
Stavros Thomadakis, IESBA Chairman
Ken Siong, Technical Director
IESBA Meeting
Livingstone, Zambia
December 4-8, 2017

2. Context Now
Fully restructured and substantively revised Code at end of current planning horizon (2018)
Major changes to architecture (Structure) and logic of the Code (enhanced CF, safeguards)
Enhanced ethical requirements and guidance for PAIBs (Part C)
Robust upgrades (NOCLAR, Long Association, Inducements)
Enhanced guidance (Prof Skepticism/Prof Judgment (short term))

3. Environmental Factors
Context Now
Environmental Factors
Rapid spread of digital technologies, “data economy” transformations
More liquid workforce, use of “contingent workers”
Continuing regulatory pressure:
Steer Code to meet needs of audit inspection authorities
Timely standard setting
Heightened stakeholder expectations re SSB coordination
Joint Sept 2017 IAASB-IESBA discussion re seek SWP alignment along dimensions of time, substance and due process

4. Sept 2017 CAG and Board Discussions
SWP Survey Responses
Sept 2017 CAG and Board Discussions
CAG broadly aligned with PC analysis re top 6 standard-setting priorities
Board also broadly supportive of PC analysis but…
Keep post-implementation review of restructured Code high on forward agenda
E-Code and implementation should be central to future strategy
Outreach and global adoption important axes re restructured Code
Reflect on what should be success factors in 2023, esp. relevance, quality and global adoption
Maintain some reserve capacity to address emerging issues

5. Proposed Vision for the Code
Strategic Orientation for
Proposed Vision for the Code
A Code that will:
Guide the ethical conduct of PAs worldwide in a way that is robust, relevant and fit for purpose;
Reflect, and will be enabled by, developments in technology; and
Be recognized worldwide as a high ethical benchmark for the global accountancy profession.

6. Matter for Consideration
Strategic Orientation for
Matter for Consideration
Do Board members support Planning Committee’s proposed vision for the Code?

7. Strategic Orientation for 2019-2023
Strategic Themes
Striving to ensure a modern, relevant and readily accessible Code
Raising the ethical bar for PAs globally, including strengthening auditor independence
Increasing global adoption of the Code and facilitating its effective implementation
Proactively engaging and seeking cooperative avenues with key stakeholders

8. Strategic Orientation for 2019-2023
Strategic Themes
Striving to ensure a modern, relevant and readily accessible Code
Respond to ethical implications of technological transformations
Leverage digital technology to broaden reach and increase access to Code
Respond to regulatory and other developments internationally
Raising the ethical bar for PAs globally, including strengthening auditor independence
Continue to enhance auditor independence provisions, with particular focus on definitions of PIE/listed entity, and concept of materiality
Respond to public concerns re ethical dimensions of tax planning services

9. Strategic Orientation for 2019-2023
Strategic Themes
Increasing global adoption of the Code and facilitating its effective implementation
Imperative to promote global adoption and implementation of restructured Code
In due time, assess whether IESBA objectives met re post-implementation review
Proactively engaging and seeking cooperative avenues with key stakeholders
Major axis of cooperation and coordination with IAASB
Proactively engage with other important stakeholder groups, including regulatory community, investors/TCWG, NSS, PAIBs and SMPs, firms, academia, etc

10. Matter for Consideration
Strategic Orientation for
Matter for Consideration
Do Board members support Planning Committee’s recommendations regarding strategic themes?

11. Criteria Influencing Development of Work Plan
Developing the Work Plan
Criteria Influencing Development of Work Plan
Benefits to public interest of undertaking particular action
Enhance public trust in Code and profession
Promote ethical mindset for professional judgment
Support public interest outcomes
Increase global adoption of the Code
Pervasiveness of the matter
Degree of urgency
Global relevance
Feasibility within realistic timeframes

12. Managing Delivery of SWP
Developing the Work Plan
Managing Delivery of SWP
Key focus areas
Strength of Board reputation and global acceptance of the Code
Capacity at leadership, volunteer and staff levels
Operational effectiveness and stability
Robust outreach and communication with stakeholders

13. Matter for Consideration
Developing the Work Plan
Matter for Consideration
Do Board members support criteria for developing work plan and approach to managing its delivery?

14. Pre-commitments # Topic Status 1. NAS Not started 2.
Fee-related matters
Fact finding in progress; WG report expected Q2 2018 3.
Professional skepticism (longer term)
Under way; consultation paper approval Q2 2018 4.
E-Code 5.
Alignment of Part 4B with ISAE 3000 6.
NOCLAR post-implementation review 7.
Long association post-implementation review 8.
IAASB-IESBA coordination topics (excl. PS)
Objectivity of EQCR started; others to be prioritized

15. Top 6 Priorities (Factoring CAG and Board Support)
Future Standard-setting Initiatives
Top 6 Priorities (Factoring CAG and Board Support)
Survey Ref #
Topic
Potential Scope
Strong Convergence of Views B1
Technology and innovation
Broad B2
Models of service delivery B5
Tax planning and related services
Significant Convergence of Views B3
Definitions of PIE and listed entity
Narrow B6
Materiality
B12
Post-impl. review – restrd. Code

16. Topics with Less Significant or Weak Support
Future Standard-setting Initiatives
Topics with Less Significant or Weak Support
Survey Ref #
Topic
Potential Scope
Less Significant Support
B10
Breach of the Code
Narrow
B13
Meaning of global “public interest”
Broad B8
Documentation B7
Communication with TCWG
Weak Support
B11
Definitions and descriptions of terms B4
Collective investment vehicles B9
Familiarity threat in relation to extant Part C

17. Technology and Innovation
Future Standard-setting Initiatives – Relevant Considerations
Technology and Innovation
Particular PIOB interest
Establish WG to explore and scope out issues? Involve external experts?
Given fast pace of change, begin exploratory work without awaiting SWP finalization?
Potentially pervasive
New patterns of social behavior in data economy, “always on” culture?
Impact on definitions of terms and concepts in the Code, e.g. independence of mind when relying on AI?

18. Technology and Innovation
Future Standard-setting Initiatives – Relevant Considerations
Technology and Innovation
Broad scope – PAPPs and PAIBs
Potential for multiple work streams?
Linked to topic of service delivery models
Initial deliverables
Thought piece/discussion paper?
Staff alerts/FAQs?
Likely need to coordinate response with IAASB/IAESB
Track work of IAASB Data Analytics WG?

19. Developments in Models of Service Delivery
Future Standard-setting Initiatives – Relevant Considerations
Developments in Models of Service Delivery
Broad scope – PAPPs and PAIBs
Implications for definitions or descriptions of key concepts such as “office,” “engagement team,” “employee?”
Other questions related to “outsourcing,” both from clients to firms, and from firms to shared service centers
Linked to topic of technology and innovation
Initial deliverable – Discussion paper? Staff alerts/FAQs?
Likely need to coordinate response with IAASB/IAESB

20. Tax Planning and Related Services
Future Standard-setting Initiatives – Relevant Considerations
Tax Planning and Related Services
Broad scope – consider roles of both PAPPs and PAIBs
Central Q: how to clearly define ethical boundaries for such services
Much research and thinking already done by policy-makers, think tanks, international/regional organizations, IFAC member bodies
E.g., OECD, Accountancy Europe, ICAEW
Views/attitudes across jurisdictions diverse
Challenge to keep politics out of debate but opportunity for IESBA to take leadership role?
Deliverables?

21. Definitions of PIE and Listed Entity
Future Standard-setting Initiatives – Relevant Considerations
Definitions of PIE and Listed Entity
Robustness of current PIE definition a central concern for IOSCO, Basel Committee and IAIS
Wide variation of definitions around the world
SMP concerns re scoping in small entities in PIE definition
Distinction re PIE/non-PIE for independence still justifiable?
Listed entity definition has raised questions of interpretation in EU
Scope will be PAPPs and independence standards
Likely need to coordinate with IAASB

22. Future Standard-setting Initiatives – Relevant Considerations
Materiality
Scope: mainly independence standards but also touches other parts of the Code (e.g. in relation to breaches)
A specific IOSCO concern re adequacy of guidance
Linked to NAS initiative
Deliverable: enhanced guidance in the Code
Potential need to coordinate with IAASB?

23. Post-implementation Review (Excl. NOCLAR and LA)
Future Standard-setting Initiatives – Relevant Considerations
Post-implementation Review (Excl. NOCLAR and LA)
Assess whether restructured Code met objectives of Structure project?
What about substantive revisions from Safeguards?
Whole restructured Code or targeted areas?
When and how? Timeline?
Interaction with NOCLAR and LA post-implementation reviews?
Opportunities for synergies in work effort?
Deliverable – report of findings to IESBA?
Lessons from IAASB’s post-implementation review for clarified ISAs?

24. Other Proposed Initiatives
Future Standard-setting Initiatives
Other Proposed Initiatives
Subject to availability of resources:
Communication with TCWG
Documentation
Reserve some capacity for general maintenance of the Code

25. Adoption and Implementation
Developing the Work Plan
Adoption and Implementation
Strong support from survey respondents for indicated activities
Major effort on outreach and communication re release of restructured Code
Develop and execute robust communication strategy
Pursue proactive outreach agenda
Track and report on progress of global adoption of the Code
Commission development of appropriate staff publications
Pursue cooperation opportunities with key stakeholders, including NSS, regulators, firms, and IFAC SMP and PAIB Committees
Speak out on ethics-related developments

26. IFAC SMP Committee Comments on Agenda Material
Start monitoring implementation of restructured Code from Q3 2022
Support for rollout initiatives re restructured Code; consider doing more
Re NAS – be cautious about “regulatory creep”; Code must remain principles-based and globally operable
Focus on evidence-based standard setting and appropriate research of issues

27. Matters for Consideration
Developing the Work Plan
Matters for Consideration
Views on :
Proposed Work Plan re content and timing?
Individual identified priority actions?
Views on proposed 2018 Work Plan?

28. Matter for Consideration
Other Identified Topics
Matter for Consideration
Input from IOSCO – Agenda Item 6-B
Do Board members agree with PC responses?

29. Matter for Consideration
Other Identified Topics
Matter for Consideration
Matters identified for future Board attention during current or recently completed projects – Agenda Item 6-C
PC recommendation to consider under general maintenance initiative
Do Board members agree?

30. Future Strategy and Work Plan
Forward Timeline
Mar 2018
Discussion with CAG
IESBA approval of CP
MaY 2018
Discussion with NSS
Sept 2018
Full review of responses to CP – CAG and IESBA
Dec 2018
IESBA approval of final SWP
Mar 2019
PIOB approval of final SWP