Review of Part C Phase 2 - Inducements Helene Agélii – IESBA member and Task Force Chair IESBA Meeting New York, USA June 19-21, 2017

Part C – Projects Status Part C Phase 1 Restructured text included in Structured ED-2 Part C Phase 2 Applicability – Full review of ED comments (tomorrow) Inducements – Aim to obtain Board approval for exposure at this meeting

Inducements – Recap of Board Discussions March 2017 Board meeting Focus on S250 (PAIBs) Highlighted consequential amendments to S340 (PAPPs) Discussed S420 and S906 (Audit, Review and other Assurance Engagements) May 2017 Board teleconference Substantive Board agreement reached on Section 250 text

Inducements – Outline of Session Section 250 Discuss and agree to finalized text for ED Section 340 Discuss and agree on consequential amendments Sections 420/906 Discuss and agree on conforming amendments

Section 250 – Revisions since May 2017 Teleconference Strong support from Board during teleconference Key changes highlighted in Agenda Item 2-A: Reverse order of clauses in R250.5 – PA needs to have some knowledge to begin with Subheadings made clearer

Proposed Section 250 Matter for Board’s Consideration TF’s proposals in Agenda Item 2-B Does IESBA agree with revised text for proposed S250?

Section 340 – Consequential Amendments Agreed-in-Principle Text Restructured extant provisions for PAPPs (S340) Proposed Section 340 (Revised) Cover all types of inducements Include offering of inducements by PAs Provides definition of inducements Clear prohibitions and requirements How to determine intent Guidance on applying CF Expanded section on ICFM Reference to other sections Changes to enhance guidance for PAPPs when dealing with inducements, thereby making Code more robust

Section 340 – Consequential Amendments Agenda Item 2-C highlights how the text in S250 has been tailored for PAPPs/client relationship: Changed reference to entities/individuals Tweaked examples in certain paras. (e.g., 340.11 A4, 340.13 A1) Removed PAIB references to S240 and S270 Added references to International Independence Standards (S420 and S906)

Proposed Section 340 Matter for Board’s Consideration Does IESBA agree with proposals in proposed Section 340?

Sections 420 and 906 – Conforming Amendments The TF’s approach and rationale: Takes into account Board input during March 2017 meeting Retain the scope of S420 and S906 to gifts and hospitality Holistic approach vs new elements in the sections Provisions for all PAPPs when offering and accepting all inducements – S340 Audits & reviews – S420 Other assurance – S906

Sections 420 and 906 – Conforming Amendments Rationale for key changes to turnaround version: Title changed back to “Gifts and Hospitality” Introduction Section (paras 420.2 and 906.2) Merging 420.5 A1 with R420.4 (906.5 A1 with R906.4)

Proposed Sections 420 (Revised) and 906 (Revised) Matters for Board’s Consideration Does IESBA agree with proposed conforming amendments to proposed S420 and S906?

Way Forward Release ED – July 2017 120 day comment period – Nov 2017 Full review of ED comments – March 2018 Matters for Board’s Consideration Do IESBA members agree with the proposed timeline and the exposure period?