Date posted: 04/06/2020 2 min read

Joint submission on IESBA proposals for non-assurance services

CA ANZ and ACCA have lodged a joint submission to the IESBA on its proposals in relation to non-assurance services

On 4 June 2020, Chartered Accountants ANZ and ACCA lodged a joint submission on the IESBA’s exposure draft on the proposed amendments to the International Code of Ethics (the Code) concerning the provision of non-assurance services (NAS) to audit clients.

Key points from our submission include: 

  • We support what the IESBA is trying to achieve in addressing public perceptions and strengthening the Code. Most of the proposed changes are reasonable and represent a positive step forward, by responding to concerns about the independence of auditors. Clearly there is a need for clarifying and strengthening requirements, balanced with the importance of having a diverse multidisciplinary skill set to support high quality audits – overall, we believe the ED achieves this balance.
  • We have concerns around the very strong focus on the management of self-review threats as a means to enhancing auditor independence. While we accept that the appropriate awareness, and avoidance, of self-review threats are key to maintaining actual and perceived independence, we have concerns that this will focus auditors on this threat to the exclusion of other threats highlighted by other stakeholders.
  • The proposed revisions result in an effective increase of a ‘black-list’ and introduce more rules to the Code. Our preference is always for the Code to have strong, clear principles that allow auditors and assurance practitioners to manage their ethical responsibilities appropriately. While we accept that it is necessary for the Code to contain some explicit prohibitions there is a need for balance.
  • We strongly support the Board’s project to review the definition of a PIE used in the Code and to harmonise it, as far as possible, with the concept of an Entity of Significant Public Interest (ESPI) used in the IAASB’s standards. Further we encourage the Board to complete the revision of the definition of a PIE before finalising and issuing the revisions to the NAS provisions. This would allow stakeholders to reconsider the proposed revisions for NAS in light of any consequences for entities who may be newly captured by a revised PIE definition.

Search related topics