Page 1 | Confidential and Proprietary Information IESBA Strategy Survey Ken Siong, IESBA Technical Director IESBA CAG Meeting April 10, 2013 New York
Page 2 | Confidential and Proprietary Information Survey distributed electronically to 700+ stakeholder contacts – 115 responses were received Overview of Responses
Page 3 | Confidential and Proprietary Information Overview of Responses Stakeholder Group# ResponsesPercentage Regulators and audit oversight bodies87% Users of financial statements1210% Standard setters1210% Academia44% Professional accountants in business44% Professional accountants in government22% Professional accountants in public practice2724% Representative of an IFAC member body3228% Other1411% Total115100%
Page 4 | Confidential and Proprietary Information Most frequently identified issues relate to: –Smaller enterprises, SMPs and non-public entities –Relationships, including independence requirements for component auditors, and ethical requirements for entities that are not audit clients but parents or subsidiaries of audit clients Other commonly recurring themes include: –Focus on learning, application material, adoption and implementation –Stable platform –Summary of requirements –Ethical issues pertaining to PAIBs –Further emphasis on outreach Possible Projects
Page 5 | Confidential and Proprietary Information Remediation Enforceability of the Code Ethical requirements for joint auditors Ethical requirements relative to non-audit clients that are parents or subsidiaries of audit clients Auditors’ cooperation with financial markets regulators How to improve compliance through education and training Possible Projects – Regulators and Oversight Bodies
Page 6 | Confidential and Proprietary Information Relative Prioritizations of Identified Items – Top 5 #Project or Initiative% Ranking as Important / Very Important 1.Structure of the Code76% 2.Guidance for PAs in public practice providing non-assurance services 74% 3.Guidance on meaning of the public interest 74% 4.Linkage between ISAs and the Code73% 5.Preparation of accounting records and financial statements for an audit client 63%
Page 7 | Confidential and Proprietary Information Relative Prioritizations of Identified Items – Others #Project or Initiative% Ranking as Important / Very Important 6.Disclosure of compliance with ethical requirements in auditors’ reports 59% 7.Guidance on reasonable and informed third-party test 58% 8.Guidance on objectivity when independence is not required 54% 9.Independence requirements for PAs not in public practice who perform assurance engagements 51%
Page 8 | Confidential and Proprietary Information Development of application and implementation resources Improving the content of the Code Understand and address issues relevant to SMEs/SMPs Enhance communication initiatives, including: –Thought leadership –Roundtables Adoption and Implementation – Most Common Ideas
Page 9 | Confidential and Proprietary Information Work with academic community to undertake research Liaise with academics to add accounting material to curricula Work with the IFAC Advisory Compliance Panel Implement support structures for non-English speaking Simplify standard-setting process Institute a stable platform to allow IFAC member bodies and firms time to implement the Code Adoption and Implementation – Other Ideas
Page 10 | Confidential and Proprietary Information Place additional emphasis on more countries adopting the Code Perform analysis of reasons for differences between the Code and national requirements Analyze efforts of IFAC member bodies to implement the Code Better coordination between the IESBA and IAASB Coordinate with INTOSAI Scope Sections 290 and 291 out of the independence requirements to facilitate convergence Develop clear guidance on meaning of convergence and it would take to achieve it Convergence – Various Suggestions
Page 11 | Confidential and Proprietary Information NSS discussion May 2013 IESBA consideration of survey input and draft consultation paper June 2013 CAG discussion September 2013 IESBA approval final strategy December 2013 Forward Timeline