Structure of the Code
Don Thomson, Task Force Chair
IESBA Meeting
New York
October 13-15, 2014
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Recent developments
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Several TF meetings and e-mail exchanges
Drafting conventions refined and shared with TFs
Additional material in process for January
Additional input received re Consultation Paper
– September CAG and October Forum of Firms
– Pre-meeting comments from Board members
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Input received
• Supportive overall; specific issues re CP follow
• Other issues
– Safeguards and "other matters" are important (CAG)
– Stakeholders also dealing with EU changes (CAG, FoF)
– Prior to ED, consider translatability (FoF)
– Facilitate thorough analysis, recognizing volume (FoF)
– Work effort significant; timeline optimistic (FoF)
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Consultation Paper
Introduction and Background
• 2 : Change meaning only if agreement, process
– Respondents may want changes outside scope (FoF)
• 10 : Timing – reference to other projects (Board)
– Safeguards outside scope; in SWP and not in CP
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Consultation Paper
Restructuring the Code
• 14, 17 : "Requirements" heading unchanged
– Includes prohibitions (Board – TF considered)
• 15, 17 : Clarified linkage to conceptual framework
– Reference to framework repeated; more self-contained
• More questions; presented in a more logical order
– Throughout CP
– Previous draft less clear, less detailed (Board)
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Consultation Paper
Use of Language
• 20, 21, 22 : Link to defined / described terms
– Clarity of terms not previously resolved (Board)
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Consultation Paper
Reorganization of the Code
• 25 : Standards mentioned, question posed
– Consider standards, particularly independence standards
(CAG, Board)
– Restructuring to date has reduced differences
• Coverage of topics more self-contained
• Also consider branding (WG) - deferred
• Examples not set out as standards; not branded
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Consultation Paper
Reorganization of the Code
• 26, 27 : Renumbering proposal unchanged
– Did not reduce 3 digits to 1 (Board – TF considered)
• 27 : Proposals include
– Sections 290 and 291 remain separate (Board)
– Extant Part C relocated ahead of Part B (Board)
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Consultation Paper
Responsibility
• 32 : 300.201(c) to specifically mention breaches
– Firm policies and procedures to require reporting of
breaches to responsible individuals
– Concern that Code may not be sufficiently specific,
particularly regarding the identification of individual to
whom report breaches – reporting should be outside the
engagement team to firm / national level (CAG)
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Consultation Paper
Electronic Code and Concordance
• 37 : HTML version being developed
– Enhanced navigation and hyperlinks
• Concordance limited to paragraph references
– Concern about amount of material to review (FoF)
– Considering side-by-side (extant v proposed) wording
for ED
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Consultation Paper
Illustrative Examples
• Foreword expanded (previously incomplete)
– Explanation of terms; how to use Code
• 200s : PAIBs ahead of PAIPPs / independence
• Intent to enhance Code; avoid any weakening
– Mindful of guidance v requirement
• Revised draft will address other input
– Intended focus of discussion and CP is on approach
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Forward timeline (tentative)
• Oct'14– C P approved
• Sep'15– draft ED (CAG)
• Jan'15– review continues
• Oct'15– ED approved
• Mar'15– responses (CAG)
• Apr'15– responses
• Early'17– Finalize / issue
restructured Code
• Jun-Jul'15– draft ED
• Jan'18– Code effective
subject to responses to CP,
timing of safeguards project
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The Ethics Board
www.ethicsboard.org