9
Issue 30 April - June 2015
Committee forAuditor Ethics (CFAE)
IESBA's proposed standard on responding to non-
compliancewith laws and regulations (NoCLAR)
The International Ethics Standard Board for Accountants
(IESBA), on 6 May 2015, released the re-exposed
Proposed
Standard on Responding to Laws and Regulations (NoCLAR)
.
As the IRBA
Code of Professional Conduct for Registered
Auditors
adopted Parts A and B of the IESBA Code, the
proposed standard will be considered by the CFAE for
possible amendments to the IRBA Code that could affect
registered auditors.
The proposed standard sets out a new framework to guide
auditors in deciding how best to act in the public interest when
they come across an act or suspected act of non-compliance
with laws and regulations.
The proposed standard is available in a PDF format and may
be downloaded from the
. Registered auditors
and others are invited to submit any comments regarding the
proposed changes directly on the
. Comments
on the exposure draft are requested by
4 September 2015
.
IESBA reinforces auditor independence provisions,
further limits exceptions and clarifies guidance around
non-assurance services
independence provisions in the
Code of Ethics for
Professional Accountants
(the Code) by, in particular, no
longer permitting auditors to provide certain prohibited non-
assurance services to public interest entity (PIE) audit clients
in emergency situations, and ensuring that they do not
assume management responsibility when providing non-
assurance services to audit clients.
The revisions include the removal of provisions that permitted
an audit firm to provide certain bookkeeping and taxation
services to PIE audit clients in emergency situations, as these
were susceptible to being interpreted too generally. In
addition, the revised provisions include:
?
New and clarified guidance regarding what constitutes
management responsibility; and
?
Clarified guidance regarding the concept of “routine or
mechanical” services relating to the preparation of
accounting records and financial statements for audit clients
that are not PIEs.
To access the pronouncement, visit the IESBA website:
. The changes will be considered by the
CFAE at its September 2015 meeting for recommendation to
be adopted by the IRBABoard at its November 2015meeting.
Proposed Amendments to the Code relating to the
Definition of Public Interest Entities
The CFAE has received 20 responses from registered
auditors to its exposure draft on
Proposed Amendments to the
IRBA Code of Professional Conduct for Registered Auditors
(the IRBA Code) relating to the Definition of Public Interest
Entities
. The CFAE continues to work on processing the
responses and will keep registered auditors apprised of any
developments and possible changes to the Code.
ETH I CS
