1. Part C Helene Agélii, Chair Part C Task Force IESBA Meeting
March 15, 2016
New York

2. Short Recap Phase 1 of the project: Focus on Sections 320 and 370
Conforming changes in Sections 300, 310, 330 and 340
Board approval of close-off document for Phase 1 at the November/December 2015 meeting

3. Short Recap
Restructuring text of Part C Phase 1 into new format
Phase 2:
The applicability of Part C to PAPPs
Section 350/Section 260

4. March 2016: First read of restructured Phase I
Timeline
March 2016: First read of restructured Phase I
June 2016: IESBA to approve close-off Phase I document
Recommendations to Board re. applicability of Part C to PAPPs
Sept 2016: First read of Section 350/260 ED
Dec 2016: Approve Section 350/260 ED

5. Restructuring Phase 1 - Process
Part C final pronouncements amended based on the drafting guidelines
Guidance in extant Part B & Part C same/similar:
Followed Structure ED
Liaised with Structure Task Force to obtain feedback

6. Restructuring Phase 1 – General Changes
May/Might – highlighted in yellow
Threats and safeguards paragraphs:
Shaded in gray and potentially subject to further revisions
Safeguards-specific revisions will form part of the second Safeguards ED
Explanations of key changes in Agenda Item 5-B Comments column

7. Restructuring Phase 1 – Specific Changes
Question 1 (p. 1): Footnote of definition of a PAIB – repeating definition of a PAIB
Question 2 (p. 17): Application placed before requirement
Question 3 (p. 24): No reference to CF as no mention of threats and safeguards in the section
Question 4 (p. 26): Removal of “who are responsible” – scope increased?

8. Restructuring Phase 1 – Specific Changes
Question 5 (p. 26): Guidance in bullet points – Include as requirement or separate application paragraph?
Question 6 (p. 28): Restructuring of extant – Create new requirement paragraph?
Question 7 (p. 46): No reference to CF as no mention of threats and safeguards in the Section

9. General comments from the Board

10. Phase 2 – Applicability of Part C to PAPPs
Extant / 300.1:
Two distinct parts of the Code, each focusing on a specific category of PAs and ethical issues related to that specific category of PA
Extant / :
– Indicate Part C is applicable to PAPPs

11. Applicability of Part C to PAPPs
Part C addresses internal and external situations for PAIBs
Part B addresses issues between PAPPs and their clients
Appears PAPPs might find Part C relevant. Otherwise could imply higher standard on PAIBs than on PAPPs

12. Applicability of Part C to PAPPs
Application of Part C to all accountants
Conflicts of Interest
Pressure
Inducements
Conclusion – Part C applicable to PAPPs at least in certain situations

13. Applicability of Part C to PAPPs
Option I: Duplicate applicable guidance in Part B:
Pro: No doubt which paragraphs applicable to PAPPs
Con: Requires time and resources to determine:
Which guidance is relevant
To which Section of Part B, if any, it corresponds to

14. Applicability of Part C to PAPPs
Option II: Amend/Clarify Definition of PAIB:
Pro: Requires minimal time and resources
Con: Blurs distinction between a PAPP and a PAIB

15. Applicability of Part C to PAPPs
Option III: Holistic Approach to the Code – change approach from a categorized perspective to a holistic one
Consider context of ethical issue and then consult relevant guidance, irrespective of which part of the Code that this falls within

16. Applicability of Part C to PAPPs
Holistic approach to the Code is the Task Force’s preference as it:
Ensures PAPPs consider guidance within Part C whenever necessary
Does not involve excessive amount of time and resources to implement
Not create an unwieldy Code due to the duplication of guidance

17. Applicability of Part C to PAPPs
Add introductory paragraph:
Where a professional accountant in public practice is performing professional activities pursuant to the accountant’s employment or ownership relationship with the employing organization, for example a firm, there might be guidance in Part C that is applicable to those circumstances. If so, the accountant shall consult those provisions and comply with them.

18. Applicability of Part C to PAPPs
IESBA members are asked for their views about whether guidance in Part C, in certain circumstances, should be applicable to PAPPs

19. Applicability of Part C to PAPPs
If IESBA members feel that certain provisions in Part C should be applicable to PAPPs, do IESBA members agree with the Task Force’s planned approach for moving forward?
If not, why? Is there an alternate approach that the Task Force should consider?

20. Applicability of Part C to PAPPs
If the IESBA members agree with the Task Force’s planned approach for moving forward, IESBA members are asked for their views on:
The Task Force’s suggested introductory paragraph
Where to position the introductory paragraph within the Code