The IESBA today released an update on its Long Association Post-Implementation Review (LAPIR). This update provides an overview of Phase 1 of the LAPIR which will review the implementation of a specific partner rotation provision for engagement partners around the world with respect to audits of public interest entities. Phase 1 commences with information gathering activities. Phase 2 is due to commence in Q2 2023.

Click here to download this update.

IFAC, the International Federation of Accountants, which comprises 180 member and associate organizations and represents 3 million professional accountants globally, continues its work to support the establishment of global sustainability standards in the public interest.

In this regard, IFAC endorses the most recent actions announced by the IFRS Foundation Trustees and IOSCO. 

Specifically, IFAC supports the IFRS Foundation’s formation of a working group and efforts to set up a multi-stakeholder expert consultative committee, both of which will accelerate progress towards a successful standards setting board. These steps demonstrate the IFRS Foundation’s focus on delivering with speed by leveraging and bringing together the work of existing initiatives.

IFAC further supports IOSCO’s establishment of a new Technical Expert Group under its Sustainable Finance Task Force, which demonstrates growing international demand for the work of the IFRS Foundation.

IFAC CEO Kevin Dancey said, “IFAC reiterates its support for the IFRS Foundation to establish an international standard setting board with a focus on enterprise value creation, a unique connection to the work of the IASB, and backing from IOSCO and other authorities.  This approach offers the quickest and most effective route to a baseline of internationally consistent sustainability-related disclosures for enterprise value creation developed in the public interest.  IFAC calls for international collaboration and cooperation to make this initiative a success.”

Read Kevin Dancey’s most recent letter to IFAC member organizations here.

At its March 2021 meeting last week, the IAASB approved Non-Authoritative Guidance on Applying ISAE 3000 (Revised) to Extended External Reporting (EER) Assurance Engagements. This guidance marks a significant step forward in supporting the evolving field of assurance for non-financial reporting. To help stakeholders understand the role of both the guidance and ISAE 3000 (Revised), which is the IAASB’s authoritative pronouncement, IAASB Chair Tom Seidenstein has published a new article detailing the guidance and how it supports the application of ISAE 3000 (Revised), growing demands for non-financial information reporting and assurance thereon, and the IAASB’s ongoing commitment to the consistent performance of quality engagements. The guidance will be published in April.

Read more on the IAASB website.

Together with ICAEW, The International Federation of Accountants (IFAC) today released the sixth installment in its Anti-Money Laundering: The Basics educational series: Installment 6: Businesses in Difficulty.  

The publication is part of a 6-month short series helping accountants enhance their understanding of how money laundering works, the risks they face, and what they can do to mitigate these risks and make a positive contribution to the public interest. Installment six looks at businesses experiencing financial difficulties and the increased risk a professional accountant may face to inadvertently facilitate money laundering.

The installment series, with its focus on accessibility and ease of use, will be a resource for Small and Medium Practices (SMPs,) and accountants less familiar with AML, while also providing guidance for those looking for a quick refresher or reference.

Anti-Money Laundering: The Basics is featured on both the IFAC (landing page) and ICAEW websites and available for download for free. To be globally relevant, the series uses the risk-based approach of the Financial Action Task Force (FATF) – the global money laundering and terrorist financing watchdog -- as a starting point. 

For more information about IFAC, visit www.ifac.org.

For more information about ICAEW, visit https://www.icaew.com/.

The IESBA today released a new staff publication providing additional context to the Board’s recently proposed revisions to the definition of a public interest entity (PIE). This staff publication supplements the guidance material in the explanatory memorandum of the Exposure Draft Proposed Revisions to the Definitions of Listed Entity and Public Interest Entity in the Code (PIE ED), which was released in January.

This staff publication will assist local regulators, national standard setters or other relevant local bodies in considering and planning adoption of the revised PIE definition when finalized and issued by the IESBA. The IESBA recognizes that there may be refinements to the proposals as a result of the comments received on exposure.

In addition to the staff publication, the IESBA will provide two opportunities on March 25 and 29 for stakeholders to attend a webinar to learn more about the proposals in the PIE ED. Register for either one of the webinars here.

Click here to download the staff publication.

About IESBA

The International Ethics Standards Board for Accountants (IESBA) is an independent global standard-setting board. The IESBA’s mission is to serve the public interest by setting ethics standards, including auditor independence requirements, which seek to raise the bar for ethical conduct and practice for all professional accountants through a robust, globally operable International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code).

The International Federation of Accountants (IFAC) last week convened over 150 chief executives and senior leaders of professional accountancy organizations around the world, together with its Board of Directors, to discuss critical issues relevant to the future of the accountancy profession.

A key focus of the meetings was hearing from key stakeholders on the future of corporate and sustainability-related reporting, and how these fit into the broader context of sustainable business and finance, where professional accountants will need to play a pivotal leadership role based on their core competencies and ethical codes. 

Kevin Dancey, CEO of IFAC, said “As we consider the future of global economies and capital markets, and the need for better reporting on sustainability and value creation, there remains a clear need for the skills, business acumen, judgment and ethical core that have always been the domain of professional accountants.  As a profession, we are actively ensuring that we are ready to address this next generation of challenges and opportunities, including by calling for the creation of an international sustainability standards board under the auspices of the IFRS Foundation that stands to serve the public interest and ultimately the development of sustainable economies.”

IFAC recently issued a letter to its member organizations outlining its corporate and sustainability-related reporting agenda, which can be found here.

Several guest speakers added important context and input at IFAC’s meetings:

• Lee White, Executive Director of the IFRS Foundation, discussed the IFRS Trustees’ current consultation related to the proposed formation of a new sustainability standards setting board;
• Tajinder Singh, Acting Secretary General of IOSCO discussed IOSCO’s sustainable finance agenda, as well as their 2021-2022 Work Plan and progress on the Monitoring Group’s recommendations;
• Mervyn King, Chair Emeritus of the International Integrated Reporting Council (IIRC) and world-renowned expert on corporate governance and reporting, spoke to the strategic importance of the accountancy profession’s leadership and engagement in integrated thinking and sustainability reporting matters.

Each of the presentations by these individuals may be accessed at the links above.

Alan Johnson, President of IFAC, said “One of IFAC’s distinct advantages is convening strategic discussions and engaging with international organizations. Our global profession plays a key role in supporting the sustainable and equitable growth of economies, and it is both necessary and rewarding to be able to advance these important topics with and for our member organizations. We look forward to continuing to position the accountancy profession at the center of these conversations, and ensuring that we help organizations and governments deliver the United Nations’ Sustainable Development Goals.”

The March, 2021 Edition of The IESBA eNews has been released and is available HERE. 

The 2-page newsletter includes highlights of the various activities going on in and around the IESBA. In this edition, learn more about the search for the next IESBA Chair, the upcoming virtual Board Meetings, and much more. 

Today IFAC completed its inaugural series—Exploring the IESBA Code—a unique, educational resource developed in collaboration with the staff of the International Ethics Standards Board for Accountants (IESBA). Launched in November 2019, each installment of the series highlights important concepts and topics in the International Code of Ethics for Professional Accountants (including International Independence Standards).

The final installment, released today, explains the “building blocks” structure of the Code and its interconnected nature. This installment is intended to help readers better understand how to use and navigate the Code so that they can quickly identify and access the ethics and independence standards and guidance relevant to them. Other topics covered in the series include: the fundamental principles, the conceptual framework, auditor independence, conflicts of interest, inducements, non-compliance with laws and regulations (NOCLAR), pressure, and the role and mindset expected of the professional accountant with a focus on bias.

“The Exploring the IESBA Code series is a very useful tool to complement the IESBA eCode,” said Dr. Stavros Thomadakis, IESBA Chairman. “Each installment provides a summary of important aspects of the Code with cues on how to read and apply its authoritative text. This final installment spotlights the purpose of the Code, how it is structured, and how it should be used—by accountants in business (PAIBs) and public practice (PAPPs), including auditors. The successful completion of this initiative demonstrates once again how IESBA’s and IFAC’s  partnership is valuable in supporting the global adoption and implementation of the Code.”

IFAC’s CEO, Kevin Dancey, said “The ethical foundation of the accountancy profession is one of its most important features. The Exploring the IESBA Code series demonstrates IFAC’s commitment to this ethical foundation and our role in supporting the important work of IESBA, as well as the International Auditing and Assurance Standards Board (IAASB) and International Public Sector Accounting Standards Board (IPSASB). I encourage our members, professional accountancy organizations and national standard setters around the world to leverage this new resource—to help raise awareness of the Code and to help professional accountants uphold their public interest responsibility.” 

About IFAC

IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of more than 175 members and associates in more than 130 countries and jurisdictions, representing almost 3 million accountants in public practice, education, government service, industry, and commerce.

About IESBA

The International Ethics Standards Board for Accountants (IESBA) is an independent global standard-setting board. The IESBA’s mission is to serve the public interest by setting ethics standards, including auditor independence requirements, which seek to raise the bar for ethical conduct and practice for all professional accountants through a robust, globally operable International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code).

Today, the International Ethics Standards Board for Accountants (IESBA) announced it is holding two global webinars focused on its recently released Exposure Draft: Proposed Revisions to the Definitions of Listed Entity and Public Interest Entity in the Code (PIE ED).

Please click below to register and join us for one of the 60-minute webinars (both will cover the same information and are being offered to accommodate different time zones).

• Thursday, March 25, 2021, 4:00 AM - 5:00 AM EDT
• Monday, March 29, 2021 9:00 AM - 10:00 AM EDT

During the webinars, the PIE Task Force Chair, Mr. Mike Ashley, will explain the IESBA’s key proposals in the ED, including:

• The introduction of an overarching objective for additional independence requirements for audits of PIEs
• Approach to revising the PIE definition and the introduction of a new term “publicly traded entity” to replace “listed entity”
• Anticipated role of regulators, national standard setters and other relevant local bodies to refine the PIE definition as part of the adoption process
• Increased role of firms

Don’t miss out on this unique opportunity to engage with representatives of the IESBA and learn more about these important proposals which will affect the scope of application of the IESBA’s International Independence Standards.

The IESBA welcomes comments on the PIE ED from all stakeholders, including investors and other users of financial statements, the corporate governance community, the regulatory and audit oversight community, preparers, firms, national standard setters, IFAC member bodies, academics and others.

The comment deadline for the PIE ED is May 3, 2021. 

If you have any questions, please email Geoff Kwan at GeoffKwan@ethicsboard.org.

About IESBA

The International Ethics Standards Board for Accountants (IESBA) is an independent global standard-setting board. The IESBA’s mission is to serve the public interest by setting ethics standards, including auditor independence requirements, which seek to raise the bar for ethical conduct and practice for all professional accountants through a robust, globally operable International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code).

Watch the webinar: 

As an increasing number of businesses around the world implement integrated reporting as a route to long-term value creation and sustainable development, the demand for assurance services on such reports is expected to rise accordingly. To help meet this demand, and to increase confidence in integrated reporting, the International Federation of Accountants (IFAC) and the International Integrated Reporting Council (IIRC) are launching a new joint initiative, Accelerating Integrated Reporting Assurance in the Public Interest (“the Initiative”).

The Initiative recognizes that new thinking is required to determine what comprises integrated report assurance and how to best deliver it, given integrated reporting’s broad and forward-looking focus on value creation. The Initiative, which will be rolled out in installments, is designed to heighten awareness of key issues, drive constructive conversation with and among key stakeholders, and encourage providers and users of assurance services in particular to lend their voices to the effort.

The first installment is being released today and sets out what integrated reporting assurance involves for organizations, auditors, and others. This installment also addresses the difference between the two types of assurance - limited and reasonable - and what is required of auditors and organizations to strive for reasonable integrated reporting assurance.

Feedback on the Initiative and the first installment can be sent to stathisgould@ifac.org. All comments are welcome, especially those that address:

• perceived or actual opportunities and challenges for progressing integrated reporting assurance
• areas in which additional thought leadership and guidance would be useful for organizations, auditors and assurance providers.

Commenting on the initiative, Charles Tilley, Chief Executive Officer, IIRC said, “We believe the move toward assurance of integrated reports, particularly the move from limited to reasonable assurance, should lead to improvements in the quality of integrated reports and underlying business practices, and enable investors and other stakeholders to have more confidence in the information reported about the business and its resilience.”

Tjeerd Krumpelman, Global Head of Advisory, Reporting & Engagement, ABN AMRO N.V. said “We decided a few years ago to obtain cover-to-cover independent assurance, based on the <IR> Framework, from our financial statements auditor, EY, on our 2017 Integrated Report. We were a groundbreaker in this regard, and encourage all other integrated reporters to do the same. We believe this pathway has not only enhanced the credibility of our report and provided stakeholders with increased confidence, but we also received valuable reporting and process improvement recommendations. Our next step is to move from limited to reasonable assurance for parts of our integrated report, and to obtain assurance on other non-financial disclosures, such as our Human Rights report, because it makes good business sense.”

Kevin Dancey, Chief Executive Officer, IFAC, said, “Integrated reporting assurance, and indeed providing assurance on all non-financial (including sustainability) information, is a critical element in the future role of accountants, requiring them to apply their professional expertise to assurance engagements that enhance the credibility of corporate reporting. Practice needs to develop quickly in this immature part of the reporting and assurance world, particularly to provide confidence in narrative and forward-looking information. Professional accountants, as preparers and assurance providers, are uniquely qualified to help lead the way in this important area.”

About IFAC
The International Federation of Accountants (IFAC) is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of more than 175 members and associates in more than 130 countries and jurisdictions, representing more than 3 million accountants in public practice, education, government service, industry, and commerce.

About the IIRC
The International Integrated Reporting Council (IIRC) is a global coalition of regulators, investors, companies, standard setters, the accounting profession, academia and NGOs. The coalition promotes communication about value creation as the next step in the evolution of corporate reporting. The IIRC’s vision is to align capital allocation and corporate behaviour to wider goals of financial stability and sustainable development through the cycle of integrated reporting and thinking. Visit: www.integratedreporting.org