Structure of the Code Don Thomson, Task Force Chair IESBA Meeting New York October 13-15, 2014

Recent developments Several TF meetings and e-mail exchanges Drafting conventions refined and shared with TFs Additional material in process for January Additional input received re Consultation Paper September CAG and October Forum of Firms Pre-meeting comments from Board members

Input received Supportive overall; specific issues re CP follow Other issues Safeguards and "other matters" are important (CAG) Stakeholders also dealing with EU changes (CAG, FoF) Prior to ED, consider translatability (FoF) Facilitate thorough analysis, recognizing volume (FoF) Work effort significant; timeline optimistic (FoF)

Introduction and Background Consultation Paper Introduction and Background 2 : Change meaning only if agreement, process Respondents may want changes outside scope (FoF) 10 : Timing – reference to other projects (Board) Safeguards outside scope; in SWP and not in CP

Restructuring the Code Consultation Paper Restructuring the Code 14, 17 : "Requirements" heading unchanged Includes prohibitions (Board – TF considered) 15, 17 : Clarified linkage to conceptual framework Reference to framework repeated; more self-contained More questions; presented in a more logical order Throughout CP Previous draft less clear, less detailed (Board)

Use of Language 20, 21, 22 : Link to defined / described terms Consultation Paper Use of Language 20, 21, 22 : Link to defined / described terms Clarity of terms not previously resolved (Board)

Reorganization of the Code Consultation Paper Reorganization of the Code 25 : Standards mentioned, question posed Consider standards, particularly independence standards (CAG, Board) Restructuring to date has reduced differences Coverage of topics more self-contained Also consider branding (WG) - deferred Examples not set out as standards; not branded

Reorganization of the Code Consultation Paper Reorganization of the Code 26, 27 : Renumbering proposal unchanged Did not reduce 3 digits to 1 (Board – TF considered) 27 : Proposals include Sections 290 and 291 remain separate (Board) Extant Part C relocated ahead of Part B (Board)

Responsibility 32 : 300.201(c) to specifically mention breaches Consultation Paper Responsibility 32 : 300.201(c) to specifically mention breaches Firm policies and procedures to require reporting of breaches to responsible individuals Concern that Code may not be sufficiently specific, particularly regarding the identification of individual to whom report breaches – reporting should be outside the engagement team to firm / national level (CAG)

Electronic Code and Concordance Consultation Paper Electronic Code and Concordance 37 : HTML version being developed Enhanced navigation and hyperlinks Concordance limited to paragraph references Concern about amount of material to review (FoF) Considering side-by-side (extant v proposed) wording for ED

Illustrative Examples Consultation Paper Illustrative Examples Foreword expanded (previously incomplete) Explanation of terms; how to use Code 200s : PAIBs ahead of PAIPPs / independence Intent to enhance Code; avoid any weakening Mindful of guidance v requirement Revised draft will address other input Intended focus of discussion and CP is on approach

Forward timeline (tentative) Oct'14– C P approved Jan'15– review continues Mar'15– responses (CAG) Apr'15– responses Jun-Jul'15– draft ED subject to responses to CP, timing of safeguards project Sep'15– draft ED (CAG) Oct'15– ED approved Early'17– Finalize / issue restructured Code Jan'18– Code effective