The International Ethics Standards Board for Accountants completed and approved an exposure draft on ethics and independence standards for sustainability reporting and assurance and a final ethics standard for tax planning and related services during a board meeting this month.
At the same meeting, IESBA said last week it also approved an exposure draft on the use of Experts and of the IESBA’s strategy and work plan for 2024-2027.
The IESBA board voted and approved during the meeting its proposed new International Ethics Standards for Sustainability Assurance (including International Independence Standards), along with proposed revisions to the International Code of Ethics for Professional Accountants on sustainability reporting.
The exposure draft will include proposed independence standards for use by all sustainability assurance practitioners regardless of whether they’re professional accountants, and specific ethics provisions relevant to sustainability reporting and assurance. That work will come after over 18 months of fact-finding, outreach and drafting by the IESBA board and its staff. The IESBA aims to release the exposure draft in late January.
The IESBA board also approved proposed ethics provisions addressing the use of outside experts by organizations and in the context of audit and assurance engagements, including sustainability assurance engagements. The provisions aim to meet public expectations concerning ethical behavior when using external experts, especially in an audit or assurance context.
“The global shift of governments, companies and investors toward a more sustainable future will not happen with good intentions and soft targets,” said
Victor Machado/Bluepeach
in a statement last week. “This movement will require hard ethics to realize sustainability goals and mitigate the risks of wrongdoing. The IESBA’s new and proposed revisions to the Code and the board’s strategy will help ensure that professional accountants and other sustainability assurance practitioners adopt the necessary ethical approaches to foster transparency, relevance and public trust within the reporting sphere while supporting global sustainability efforts.”
The IESBA also approved final revisions to its ethics code to address tax planning and related services. The revisions come in response to public concerns about ethical behavior in tax planning amid high-profile revelations about tax avoidance schemes in parts of the world in recent years. The final provisions establish an ethical framework in the public interest to guide professional accountants in making judgments and decisions when providing tax planning or related services. Pending certification by the Public Interest Oversight Board, which now oversees the IESBA, the final pronouncement is expected to be issued by mid-April 2024.
The IESBA also voted to approve a Strategy and Work Plan for 2024-2027. It will tackle two new strategic areas of focus: accounting firm culture and governance, and extending the impact of the ethics code beyond the accounting profession.
The IESBA’s 2024 agenda will focus on final approval of the sustainability-related standards, along with new workstreams to address accounting firm culture and governance, and independence considerations regarding the audits of collective investment vehicles, pension fund arrangements, and investment company complexes.
