1. Structure of the Code Phases 1 and 2 Revised Texts
Don Thomson, Task Force Chair
IESBA Meeting
New York, USA
September 29, 2016

2. Highlights of Revised Phase 1 & 2 Text
Supplements 1 to Agenda Items 3-B and 3-E
Highlights of Revised Phase 1 & 2 Text
Updated based on CAG and Board input, including advance input received
Further updating planned for December, including
Updating grayed-out material
Re-ordering (this draft reflects re-ordered 310 and 320)
Matters arising from concluding procedures, including review of consistency, sub-headings, mapping to 2016 Code, etc

3. Supplements 1 to Agenda Items 3-B and 3-E
Guide
Para.4 – Parts 4A and 4B numbers unchanged to promote IIS
Para.5 (and 100.2) – Application material description enhanced
Para.6 – Reference made to PAPPs/Firms and PAIBs
Old Para.10 – Deleted repetition of the reference to situations with no safeguards – not in ED-1, addressed in the Code
Para.11 (and Glossary) – “May”/“might” explanation added

4. Supplements 1 to Agenda Items 3-B and 3-E
Part 1 – Section 100
100.2 – “R” and “A” designation explained (already in Guide)
Application material description enhanced
100.3 A2 (Disproportionate outcomes)
Reverted to extant by adding unusual to circumstances
Added might not be in the public interest to better reflect the possibility that consultation helps clarify this
Deleted “in order to comply with the fundamental principles” to avoid confusion and align with extant (and ED-1)

5. Supplements 1 to Agenda Items 3-B and 3-E
Part 1 – Section 110
110.2 A2 – Ethical conflict resolution described more concisely, as exposed in ED-1
R112.1 (Objectivity) – Definition unchanged (after reverting to extant from ED-1) to avoid change in meaning
Consistent with dictionary definitions
112.2 A2, A3 – Deleted in response to Board input that discussion of safeguards out of place, addressed elsewhere

6. Part 3 Sections 310 and 320 re-ordered – sample for discussion
Supplements 1 to Agenda Items 3-B and 3-E
Part 3
Sections 310 and 320 re-ordered – sample for discussion
310.2 (but not 320) includes reference to fundamental principles as in extant Code and ED-1
Not proposed throughout the Code as threats discussed in the Code in many cases could refer to at least 4 of the 5 fundamental principles (integrity, objectivity, professional competence and due care, and professional behavior; confidentiality less often)
Other sections will be re-ordered after Board input

7. Supplements 1 to Agenda Items 3-B and 3-E
Part 4A – Sections 400 to 430
400.8 (PIEs) – Consider moving “member bodies” to Preface as member bodies are addressed in the Preface
– Added cross-reference to audits of “line items”
– Added cross-reference to communication with TCWG (general)
A1 – Network firms summary illustrated (Supplement 2 to Agenda Item 3-B)
A1 – Added cross-reference to general material dealing with communication with TCWG

8. Supplements 1 to Agenda Items 3-B and 3-E
Part 4A – Sections
R510.10, etc – Retained ED-1's use of "member" after "audit team", “close family” and "immediate family" rather than a longer alternative such as "member of …"
R510.10(d) – Considered Board member's concern, Task Force remains of the view that the text is consistent with extant and requirement to apply the conceptual framework
R520.5 – Sub-divided in response to Board input

9. Section 800 and Part 4B Sections 800 and 999 –
Supplements 1 to Agenda Items 3-B and 3-E
Section 800 and Part 4B
Sections 800 and 999 –
Changed "eligible restricted use audit report" to "eligible audit engagement"
Changed "eligible restricted use assurance report" to "eligible assurance engagement"
900.1 – Location for reference to audits of “line items”

10. Glossary “May” and “Might”
Supplements 1 to Agenda Items 3-B and 3-E
Glossary
“May” and “Might”
Non-Compliance with Laws and Regulations (NOCLAR)
Reasonable and Informed Third Party – Awaiting Final
Senior Professional Accountant in Business (NOCLAR)
Substantial harm (NOCLAR)

11. Other Significant Matters
Supplements 1 to Agenda Items 3-B and 3-E
Other Significant Matters
Do IESBA Members wish to raise any other significant matters that have not already been discussed?
Guide
Part 1
Part 3
Parts 4A and 4B
Glossary
The Task Force welcomes wordsmithing input off-line