1. Page 1 Part C – Section 320 Jim Gaa, Task Force Chair and IESBA Member IESBA Meeting December 4-6, 2013 New York

2. Page 2 March 2013: Project Proposal approved by IESBA: - Issues: Pressure; Section 320; Inducements June 2013: Application of Part C to PAPPs September 2013: Pressure to engage in unethical or illegal acts December 2013: Section 320 Background

3. Page 3 Is the Conceptual Framework appropriate in Part C? Use of safeguards in Section 370 (Pressure) questioned TF view: –Complies with definition in 100.13 –Consistent with usage in part B –Conceptual framework does not fit easily into Part C but necessary to use it for the integrity of the Code –Calling safeguards “steps” just avoids the issue –TF proposal: Use of safeguards in Section 370 Conceptual Framework in Part C

4. Page 4 Changes proposed: –Non financial as well as financial information –Management as well as external information –Change “report” to “present” Section 320.1

5. Page 5 Does the IESBA support the TF proposal to strengthen the requirement in 320.2 for management and external information? “shall prepare or present information completely, fairly and honestly, without bias and in a manner that faithfully represents what the information purports to represent having regard to the purpose for which the information is to be used, the context in which it is provided and the audience to whom it is addressed” Section 320.2: Preparing and presenting

6. Page 6 Does the IESBA support the TF proposal to strengthen the requirement in 320.3 from “reasonable steps” to “shall”? Requirement: “….shall record, maintain and present information” More detailed description of the manner of recording and maintaining information Section 320.3

7. Page 7 Extant Code combines standards applicable to management and external information TF proposes to have separate standards: –Management information: “in accordance with the fundamental principles and are appropriate for their context” Does separating the requirements clarify the Section? Is the management information standard appropriate? Section 320.4-6: Separating Standards

8. Page 8 States what a PAIB shall not do Includes unethical/misleading information but does not define it Recognizes that reporting frameworks allow discretion which can still be misleading Should the Code prohibit misleading financial statements which are compliant with the applicable financial reporting framework? Section 320: Misleading information

9. Page 9 Dissociation creates practical problems for PAIBs TF suggests practical steps Internally: through next higher level of authority Externally, but without permission, is a breach of confidentiality. Suggest process be no more onerous than 360 The IESBA is asked for comments on Dissociation Section 320.9 Dissociation

10. Page 10 Paragraph 320.8 links closely with Sections 340, 360, 370 IESBA drafting conventions avoid cross referencing TF propose cross referencing Section 370 to avoid repetition, and to be more usable The IESBA is asked to consider whether cross referencing other sections should be employed to avoid repetition and to make the Code more easily usable Section 320: Link to Section 370 (Pressure)

11. Page 11 Comments or questions on the revised Section 320? Questions?

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