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Page 1 | Confidential and Proprietary Information Responding to Suspected Illegal Acts Robert Franchini Sydney, September 2013.

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Presentation on theme: "Page 1 | Confidential and Proprietary Information Responding to Suspected Illegal Acts Robert Franchini Sydney, September 2013."— Presentation transcript:

1 Page 1 | Confidential and Proprietary Information Responding to Suspected Illegal Acts Robert Franchini Sydney, September 2013

2 Page 2 | Confidential and Proprietary Information Key tentative agreements: –PAs are permitted to override confidentiality in reporting matters to an appropriate authority when it is judged to be in the “public interest” –Focus on providing guidance rather than prescriptive requirements –One section for all PAs in public practice –No limitation on type of reportable illegal act –Task Force to explore options for disclosure in the case of audits of PIEs where legal framework affords protection –Confirmed general approach for PAIBs IESBA June 2013 Meeting Responding to Suspected Illegal Acts

3 Page 3 | Confidential and Proprietary Information Alignment with ISA terminology of “non- compliance”: –Definition currently proposed for SIA is identical to the ISA definition of “non-compliance with laws and regulations” –Use of “identified or suspected” is more precise and less confusing –Use of “non-compliance” recognizes that all forms of non- compliance should be brought to the attention of management –Reduces differences with ISA 250, recognizes that the guidance in the Code is complementary to ISA 250 and will facilitate discussions with IAASB Task Force Proposals on Terminology Responding to Suspected Illegal Acts

4 Page 4 | Confidential and Proprietary Information For audit clients that are PIEs the Task Force considered: –Requirement to disclose –“Expectation” versus “presumption” –Required conditions –Documentation requirements Task Force Proposals on PIE Audit Clients (1/2) Responding to Suspected Illegal Acts

5 Page 5 | Confidential and Proprietary Information The Task Force settled on a “presumption” that the PA will disclose when: –The matter is material to the financial statements and the statements do not reflect the matter –There is an appropriate authority to receive the disclosure –The client has not self-reported –There is protection from civil and criminal liability –Requirement to document when disclosure has not been made Task Force Proposals on PIE Audit Clients (2/2) Responding to Suspected Illegal Acts

6 Page 6 | Confidential and Proprietary Information The Task Force reconsidered and confirmed its view that it was not necessary to develop distinct provisions for clients that are individuals in Section 225 Task Force has developed guidance on why documentation would be useful and considered its placement in the Code Other Task Force Proposals on Section 225 Responding to Suspected Illegal Acts

7 Page 7 | Confidential and Proprietary Information For PAIBs the proposed section has been aligned to the new proposals for Section 225 No “presumption” to disclose for PIEs Task Force Proposals on Section 360 Responding to Suspected Illegal Acts

8 Page 8 | Confidential and Proprietary Information Review of Agenda Item 2-D Task Force Proposals on Existing Sections of the Code Responding to Suspected Illegal Acts


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