1. Jens Poll, Deputy Chair, SMP Committee
Ethics
Jens Poll, Deputy Chair, SMP Committee
IFAC SMP Forum
Beijing, China
October 28, 2009

2. Implementation guidance
Ethics
Overview
IESBA Code
What’s new?
Effective date
Transitional provisions
Implementation guidance
Planned toolkit
Under consideration
Other suggestions?
Future projects

3. What’s New – Drafting Conventions?
Ethics
What’s New – Drafting Conventions?
Sharpening of language
Requirements designated by use of “shall”
Consistency of language “consider”, “evaluate” and “determine”
Clarification that situations discussed in the Code are requirements
No change to the structure of the Code
Exception clause in the ED replaced by targeted guidance on mergers and acquisitions

4. What’s New – Independence?
Ethics
What’s New – Independence?
Replacing “clearly insignificant” in favor of “acceptable level”
Changing documentation requirements
Public interest entities (PIEs)
New definition
All listed entity provisions to apply to PIEs
Split into two sections – section 290 applies to audit & review, section 291 to other assurance engagements

5. What’s New – Independence?
Ethics
What’s New – Independence?
Majority of changes apply to PIEs:
Cooling-off period before audit partner or senior partner joins client
Partner rotation
Extended to all key audit partners
No rotation if regulator exemption
Some tightening of non-assurance services
Pre- or post-issuance review if total fees exceed 15% firm fees

6. What’s New – Independence?
Ethics
What’s New – Independence?
Non PIE changes
Management functions
Tax services
Calculation of current and deferred tax liabilities for purpose of preparation of accounting entries creates a threat
Tax planning not allowed if material, and depends on doubtful accounting treatment
Cannot act as advocate in public tribunal or court if matters are material
Partner compensation

7. Effective Date and Transitional Provisions
Ethics
Effective Date and Transitional Provisions
Effective January 1, 2011
Transitional provisions
Partner rotation
Public interest entities
Non- audit services
Partner compensation

8. Implementation Guidance - Available
Ethics
Implementation Guidance - Available
Toolkit
Slide decks and speaking notes
Templates
Short paper providing overview of requirements of revised Code
Comparison of revised Code to previous Code
Paper outlining the implications of the Code in an SMP environment
See

9. Implementation Guidance – Possible
Ethics
Implementation Guidance – Possible
Web-based modules
Short paper on applying code to SMPs
“Plain English” guide
Questions and answers
Other (e.g. implementation monitoring)

10. Remaining projects on current strategic plan
Ethics
What’s Next? Strategy
Remaining projects on current strategic plan
Accountants’ ethical responsibilities when encountering fraud or illegal acts
Conflicts of interest
Accountants in Government
Possible future projects – Survey stakeholders
Second opinions
Provision of financial advisory services
Provision of taxation services
Possible additional independence issues