Transcript Structure of the Code Don Thomson Working Group Chair IESBA Member IESBA Meeting December 4-6, 2013 New York Page 1

Structure of the Code
Don Thomson
Working Group Chair
IESBA Member
IESBA Meeting
December 4-6, 2013
New York
Page 1
Background
• Prior years
– Concerns expressed
• May - October 2013 – Research supports change
– CAG & NSS input received
• September 2013
– Findings
• December 2013
– Recommendations
Page 2
Distinguishing requirements
Recommendations:
• Distinguish requirements from guidance
– enhance understandability & enforceability
• Confirm: conceptual framework is a requirement
• Guidance adjacent to relevant requirements
Page 3
Responsibility of individuals
Recommendations:
• Firms' policies & procedures shall enable
identification of the individual responsible for
independence in a particular circumstance
• Change passive clauses to active where the
change would not change the meaning
Page 4
Clarity of language
Recommendations:
• Reduce the reading age
• Extend drafting conventions
• Avoid stock phrases & linguistic nuances
• Use more sub-headings
• Use an editor
• Consider translatability of changes
Page 5
Electronic Code
Recommendations:
• Coordinate changes with other recommendations
• Filter content by: user / service / client
• Enhance search functionality
• Develop hyperlinks
• Improve navigation
Page 6
Repackaging
Recommendations:
• Coordinate changes with electronic Code
• Separate independence
• Rebrand independence
– International Standards on Independence
Page 7
Complementary Materials
Recommendations:
• Work with others to develop materials
• Examples:
– Short summaries, FAQs and case studies
– Bases for conclusions
• Address these after restructuring the Code
Page 8
Restructuring example (2-C)
• Three segments of Section 290 reworked
• Stage one of a process to explore the practical
challenges of addressing visibility & responsibility
• These are not proposals
• Presented to obtain IESBA views on 7 questions
Page 9
Restructuring example (2-C)
• Would changes (IN BOLD) prescribing specific
responsibility make the Code more enforceable?
• Any comments on the changes (IN BOLD) where
rewording may change the meaning of the Code?
• Are direct statements (audit may not be performed
unless….) clearer than passive statements?
Page 10
Restructuring example (2-C)
• Do changes so far enhance clarity of language?
• Any comments on the order of the requirements?
– e.g. Whether “threats” should precede or follow
matters “specifically not permitted”
• Is “compliance with conceptual framework”
language too broad or not broad enough?
• Do “purpose” paragraphs assist as introductions?
Page 11
Restructuring example (2-C)
• Any other questions arising from this approach?
• Does the IESBA support further work on the
application of the recommendations to Section
290?
– Separating requirements from guidance
– Strengthening 290.12
Page 12
Other matters
Comments or Questions?
Page 13
www.ethicsboard.org