IESBA plans to clarify professional scepticism for accountants

The International Ethics Standards Board for Accountants (IESBA) is consulting on proposals to tighten up the International Code of Ethics for Professional Accountants in a bid to clarify the level of professional scepticism expected from accountants handling audits

The proposed revisions respond to stakeholder calls for the IESBA to explore whether and how the Code could contribute to strengthening the application of concepts underlying professional scepticism by all professional accountants.

The IESBA Exposure Draft, Proposed revisions to promote the role and mindset expected of professional accountants, puts forward a number of changes to strengthen the code as well as the International Independence Standards.

As a result of earlier consultation, there was general agreement that the term ‘professional scepticism’ should be reserved for use only in an audit or assurance context, and as defined in the auditing and assurance standards issued by the IAASB.

In light of these views, the current project proposal includes the development of material (a) to promote the need for professional accountants to be inquisitive and curious about the information available in the course of undertaking professional activities, and (b) to conduct the necessary assessment or investigation of the integrity, relevance and sufficiency of that information in order to reach an informed decision.

It was also agreed that the Code should be developed to better recognise the role of bias, pressure and other impediments in influencing behaviour and how to mitigate the threats they create, while holding back on forcing all accountants outside of the audit sphere to have to adhere to standards of professional scepticism.

IESBA said: ‘The proposals include new application material to highlight the wide-ranging role of professional accountants in society as a result of the skills and values they bring to their work. These skills and values are what ultimately underpins the public trust in the profession.’

The proposals include:

  • highlight professional accountants’ wide-ranging role in society and the relationship between compliance with the Code and a professional accountant’s responsibility to act in the public interest;
  • include enhancements to the robustness of the fundamental principles of integrity, objectivity and professional behaviour;
  • further strengthen the Code through requiring professional accountants to have an inquiring mind when applying the conceptual framework; and
  • highlight the importance of being aware of bias and having the right organisational culture. 

The proposals were developed after dialogue with the International Auditing and Assurance Standards Board (IAASB) and the International Accounting Education Standards Board (IAESB).

IESBA will host a webinar in September 2019 to provide an overview of the proposed revisions. Follow the IESBA on Twitter (@Ethics_Board) for updates on how to register for this event.

The closing date for comment is 31 October 2019.

IFAC Proposed Revisions to Promote the Role and Mindset Expected of Professional Accountants, issued 31 July 2019

Sara White | 01-01-2019

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