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Structure of the Code
Don Thomson, Working Group
Chair
IESBA Meeting
June 10-12 2013
New York, USA
Page 1
Background
• Some stakeholders have expressed concern about
usability, including understandability and enforcement
• This may be impacting adoption and implementation
• Board focused on issue in 2012; formed Working Group
• Board discussed WG's preliminary thoughts in March 2013
• Input also received from CAG, National Standard Setters
(NSS) Group, individual standard setters, IFAC SMP
Committee and Strategic Review respondents
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General Input Received to Date
• Widespread, strong support
• Perform research before undertaking initiatives
– Discussion with standard setters welcomed
– Similar initiatives by certain standard setters may provide insights
• Timing should be influenced by the research findings
– Importance and urgency
– Also consider relative priorities, available resources, change
management
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Proposed Terms of Reference
(8-A Appendix A)
• Objective: Identify and recommend to the Board ways to
improve the usability of the Code, thereby facilitating
adoption or convergence, effective implementation and
consistent application
• Perform research; communicate with stakeholders
• Focus in particular on drafting conventions, format,
structure and delivery media
• Report findings and recommendations to the Board
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Proposed Terms of Reference:
IESBA members are asked to approve
• The Working Group’s proposed Terms of Reference
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Research Plan
• Research will address concerns related to the structure of
the Code impacting adoption, convergence and/or
implementation, including
– Impediments to the identification of specific individuals within a firm
responsible for actions related to independence (Responsibility)
– Impediments to the identification of requirements and prohibitions
separately from application guidance (Visibility)
– Impediments to understandability, such as the length and complexity of
sentences, style of wording and structure of the Code
– Impediments to translation
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Research Plan
• Research will address the extent to which the following
suggestions would enhance the usability of the Code
– The development of an electronic Code
– Other forms of delivery media, such as short summaries of the Code
– Complementary materials to facilitate comprehension of the Code
• e.g. questions and answers, case studies
– Repackaging the Code, for example, separating out the Code into
more distinct sections / booklets
• e.g. ethics and independence
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Research Plan
• Research is expected to include
– CAG; NSS; SMP and PAIB Committees
– Interviews with selected representatives of member bodies, regulators and
standard setters from all continents (currently planning 11 plus FEE)
• FEE have offered to assist with European perspective
• Include a selection of jurisdictions that have adopted the Code
– Respondents to Strategic Review survey, including IOSCO
– Other standard setters (IAESB, IAASB)
• May be supplemented by a consultation paper and
additional research by Compliance Advisory Panel staff
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Research Plan
IESBA members are asked for views on
• The research plan
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Possible Short Term Initiatives
• Plain English Style Guide
– Encouraging the use of plain English
– Discouraging long and complex sentences
• High level summaries
• Hyperlinks for an electronic Code
• Project addressing responsibility
– Facilitating identification of responsibility for complying with
specific requirements and prohibitions in the Code
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Short Term Initiatives
IESBA members are asked for views on:
• Whether resources should be committed to short term initiatives
before the preliminary research has been completed
• The merits of the four short term initiatives identified
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Tentative Timeline
• September 2013: Status report
• December 2013: Preliminary report on research findings
• April 2014: Final report on research findings
– Including recommendations to the Board
– Short- and longer-term initiatives
– Input to assist the Board in establishing timelines
– Consider a consultation paper on longer-term elements
• July 2014: Final draft consultation paper
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