1. Structure of the Code Don Thomson, Task Force Chair IESBA CAG Meeting
New York, USA
September 14, 2015

2. Background Enhance understandability and improve usability
Structure of the Code
Background
Enhance understandability and improve usability
Facilitate compliance and enforcement
Facilitate adoption, effective implementation, consistent application
Draft Restructured Code reflects Consultation Paper input and subsequent input from CAG and the Board, as well as National Standard-setters, Forum of Firms, SMP Committee
Liaising with IAASB (re responsibility) and Safeguards TF

3. Structure of the Code
Objectives
To consider opportunities for further improvements to the Draft Restructured Code, focusing in particular on:
The issues and task force proposals (see Agenda Item)
Advance input received
Highlights are reflected in the following slides

4. Issues and Task Force Proposals
Structure of the Code
Issues and Task Force Proposals
A. Navigability
Facilitating review of the Draft Restructured Code
Reference to extant Code or identification as new material
Preface – consistent with extant Code
Guide to the Code
Purpose of the Code, its structure and how to use the Code
An appendix providing guidance on addressing ethical dilemmas
Positioning the Code for further navigability enhancements

5. Issues and Task Force Proposals
Structure of the Code
Issues and Task Force Proposals
B. Requirements and Application Material
Reverting to the term “application material”
Requirements distinguished with "R"; "shall" a requirement
Importance of application material explained in the Guide
C. Cross-References
Reduced cross-references to the conceptual framework
New reference to objectivity in C1 (independence)

6. Issues and Task Force Proposals
Structure of the Code
Issues and Task Force Proposals
Revised wording re importance of application material
"… context relevant to a proper understanding of the Code. In particular the application  material describes how a requirement is to be applied with reference to the conceptual framework and includes examples of relevant facts and circumstances. … The entire text of the Code, therefore, is relevant to understanding and proper application of the Code's requirements. …" (D-1, para 11 revised)

7. Issues and Task Force Proposals
Structure of the Code
Issues and Task Force Proposals
D. Specific References to Network Firms
Currently in "firm" except where otherwise stated
Application of materiality/significance test
E. Relocating Certain Material to Sub-sections
Second opinions
Documentation – general and cross-references to specific
Location: in independence section v elsewhere

8. Issues and Task Force Proposals
Structure of the Code
Issues and Task Force Proposals
F. Labelling and Terminology
Labelling Parts
Professional Accountants in Business
May (permitted) and might (could occur)
Glossary
Including terms used (e.g. "audit" includes "review engagement")
Clarity and translatability

9. Matters for Board Attention
Structure of the Code
Matters for Board Attention
Task force has identified the following outside its scope:
Conceptual framework - disclosure considerations
Requirements with little or no application material
Independence standards applicable to audits of line items
Documentation requirements
Definitions and descriptions
e.g. alignment with ISAs, "employee", "materiality" and "significance"

10. Forward timeline (tentative)
Structure of the Code
Forward timeline (tentative)
2015 (October) – Forum of Firms – Draft ED 1 tranches I & II
2015 (December) – IESBA – Approve ED 1 tranches I & II
Opportunity for pilot testing throughout 2016
2016 (June?) – IESBA – Approve ED 2
ED 2 timing may be impacted by various factors, including
input received, status of other projects & timing of CAG discussion
2017 – Finalize and issue new Code
2018 – Code effective, launch electronic Code phase II