Date posted: 4/06/2020 2 min read

Joint submission on IESBA proposals in relation to fees

CA ANZ and ACCA have lodged a joint submission to the IESBA on its proposals in relation fees

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 fee-related provisions.

Key points from our submission include:

  • We are supportive of 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 and aligning the fee provisions to measures already adopted in some jurisdictions. 
  • We have reservations about the proposed threshold for firms to address threats created by fee dependency on non-public interest entity (PIE) audits. The threshold level of 30% appears too high and the introduction of a “bright-line” threshold may detract from the underlying principles of the Code and adversely impact audit quality. 
  • We have some concerns about the transparency of information regarding fees for PIEs, including the practicalities of obtaining and disclosing fee information in the absence of clear and consistent requirements for preparers in relation to disclosure of fee information for PIEs which would be more appropriately achieved via accounting standards requirements.
  • 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 fees. This would allow stakeholders to reconsider the proposed revisions for fees in light of any consequences for entities who may be newly captured by a revised PIE definition.

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