1. Review of Part C Phase 2 - Inducements
Helene Agélii – IESBA member and Task Force Chair
IESBA Meeting
New York, USA
June 19-21, 2017

2. Part C – Projects Status
Part C Phase 1
Restructured text included in Structured ED-2
Part C Phase 2
Applicability – Full review of ED comments (tomorrow)
Inducements – Aim to obtain Board approval for exposure at this meeting

3. Inducements – Recap of Board Discussions
March 2017 Board meeting
Focus on S250 (PAIBs)
Highlighted consequential amendments to S340 (PAPPs)
Discussed S420 and S906 (Audit, Review and other Assurance Engagements)
May 2017 Board teleconference
Substantive Board agreement reached on Section 250 text

4. Inducements – Outline of Session
Section 250
Discuss and agree to finalized text for ED
Section 340
Discuss and agree on consequential amendments
Sections 420/906
Discuss and agree on conforming amendments

5. Section 250 – Revisions since May 2017 Teleconference
Strong support from Board during teleconference
Key changes highlighted in Agenda Item 2-A:
Reverse order of clauses in R250.5 – PA needs to have some knowledge to begin with
Subheadings made clearer

6. Proposed Section 250
Matter for Board’s Consideration
TF’s proposals in Agenda Item 2-B
Does IESBA agree with revised text for proposed S250?

7. Section 340 – Consequential Amendments
Agreed-in-Principle Text
Restructured extant provisions for PAPPs (S340)
Proposed Section 340 (Revised)
Cover all types of inducements
Include offering of inducements by PAs
Provides definition of inducements
Clear prohibitions and requirements
How to determine intent
Guidance on applying CF
Expanded section on ICFM
Reference to other sections
Changes to enhance guidance for PAPPs when dealing with inducements, thereby making Code more robust

8. Section 340 – Consequential Amendments
Agenda Item 2-C highlights how the text in S250 has been tailored for PAPPs/client relationship:
Changed reference to entities/individuals
Tweaked examples in certain paras. (e.g., A4, A1)
Removed PAIB references to S240 and S270
Added references to International Independence Standards (S420 and S906)

9. Proposed Section 340
Matter for Board’s Consideration
Does IESBA agree with proposals in proposed Section 340?

10. Sections 420 and 906 – Conforming Amendments
The TF’s approach and rationale:
Takes into account Board input during March 2017 meeting
Retain the scope of S420 and S906 to gifts and hospitality
Holistic approach vs new elements in the sections
Provisions for all PAPPs when offering and accepting all inducements – S340
Audits & reviews – S420
Other assurance – S906

11. Sections 420 and 906 – Conforming Amendments
Rationale for key changes to turnaround version:
Title changed back to “Gifts and Hospitality”
Introduction Section (paras and 906.2)
Merging A1 with R420.4 (906.5 A1 with R906.4)

12. Proposed Sections 420 (Revised) and 906 (Revised)
Matters for Board’s Consideration
Does IESBA agree with proposed conforming amendments to proposed S420 and S906?

13. Way Forward
Release ED – July 2017
120 day comment period – Nov 2017
Full review of ED comments – March 2018
Matters for Board’s Consideration
Do IESBA members agree with the proposed timeline and the exposure period?