IESBA Proposes Revisions to Independence StandardsBy
The International Ethics Standards Board for Accountants released two exposure drafts that would further reinforce auditor independence.
Proposed Revisions to the Non-Assurance Services Provisions of the Code and Proposed Revisions to the Fee-Related Provisions of the Code are aimed at strengthening the nonassurance services (NAS) and the fee-related independence provisions of the International Code of Ethics for Professional Accountants.
Proposed changes to the NAS provisions include a prohibition on providing NAS to an audit client that’s a public interest entity (PIE) if a self-review threat to independence would be created; further tightening of the circumstances in which materiality may be considered in determining the permissibility of an NAS; strengthened provisions regarding auditor communication with those charged with governing; and stricter requirements regarding the provision of some NAS.
Proposed changes to the fee-related provisions include a prohibition on companies allowing the audit fee to be influenced by the provisions of services other than audit to the audit client; a requirement for PIEs to cease to act as auditor if fee dependence on the audit client continues beyond a specified period; and communication of fee-related information to those charged with governance and to the public.
The deadline for comments on the proposed changes is May 4, 2020. Comments can be submitted at ethicsboard.org.