Preface and Guide to the Code

Transcription

1 Agenda Item 2-F Preface and Guide t the Cde PREFACE Nte t Member Bdies and Firms The IESBA develps and issues, under its wn standard setting authrity, the Cde f Ethics fr Prfessinal Accuntants (the Cde) fr use by prfessinal accuntants arund the wrld. A member bdy f IFAC r firm shall nt apply less stringent standards than thse stated in this Cde. Hwever, if a member bdy r firm is prhibited frm cmplying with certain parts f this Cde by law r regulatin, they shall cmply with all ther parts f this Cde. Sme jurisdictins may have requirements and guidance that differ frm thse cntained in this Cde. Prfessinal accuntants in thse jurisdictins need t be aware f thse differences and cmply with the mre stringent requirements and guidance unless prhibited by law r regulatin. In additin, prfessinal accuntants, where applicable, shuld cmply with the ethical requirements f any relevant authrity which may regulate them, their clients r emplying rganizatin. Fr example, a prfessinal accuntant wh perfrms an audit fr a listed entity, may be subject t additinal independence and ethical requireme nts established by a relevant securities regulatr. Cmmented [EH1]: Preface Cmmented [EH2]: The name f the Cde in italics is subject t further cnsideratin. Cmmented [EH3]: Preface Cmmented [EH4]: Preface GUIDE TO THE CODE Purpse f this Cde 1. This Cde sets ut internatinally apprpriate standards. It cntains the fundamental principles f ethics fr prfessinal accuntants. These reflect the prfessin s recgnitin f its public interest respnsibilities. They establish the fundatin fr ethical cnduct and guide the prfessinal accuntant in the perfrmance f prfessinal activities. 2. The Cde prvides a cnceptual framewrk that prfessinal accuntants are t apply in rder t identify threats t cmpliance with the fundamental principles. The cnceptual framewrk is als used t evaluate the significance f the threats identified and apply safeguards t eliminate r reduce the threats t an acceptable level. In certain circumstances n safeguards will be available t reduce the threats t an acceptable level, s the prfessinal accuntant needs t take actin accrdingly fr example, by ending the interest r relatinship creating the threat t cmpliance with the fundamental principles. Cmmented [EH5]: and Cmmented [EH6]: Cmmented [EH7]: The wrding in this paragraph is subject t future revisin based n discussins with the Safeguards Task Frce. Hw this Cde is Structured 3. The Cde cntains three parts: Cmmented [EH8]: Part A General Applicatin f the Cde, is applicable t all prfessinal accuntants. Part B Prfessinal Accuntants in Business, is applicable t prfessinal accuntants in business which include prfessinal accuntants emplyed r engaged in an executive r nnexecutive capacity in such areas as: Cmmented [EH9]: Cmmerce, industry, r service; The public sectr; Prepared by Elizabeth Higgs and Jasn Evans (August 2015) Page 1 f 5

2 Structure f the Cde Preface and Guide t the Cde Educatin; The nt fr prfit sectr; Regulatry bdies r prfessinal bdies; r A prfessinal accuntant cntracted by such entities. Prfessinal accuntants in public practice may als find Part B relevant t their particular circumstances. Part C Prfessinal Accuntants in Public Practice, is applicable t prfessinal accuntants in a firm that prvides prfessinal services and the firms in which they practice. Part C includes general requirements and als includes: Cmmented [EH10]: Cmmented [EH11]: C1 Independence fr Audit and Review Engagements, applicable t prfessinal accuntants in public practice wh perfrm audits and reviews. C2 Independence in Relatin t Other Assurance Engagements, applicable t prfessinal accuntants in public practice wh prvide assurance services ther than audits r reviews. Cmmented [EH12]: New paragraph Cmmented [EH13]: New paragraph Each part f the Cde cntains sectins which intrduce a new tpic. Sectins may have subsectins dealing with specific aspects f the tpic. 4. The cntent within each f the sectins f the Cde is, where apprpriate, structured as fllws Cmmented [EH14]: New paragraph Cmmented [EH15]: New paragraph Scpe sets ut the subject matter addressed within the Sectin. Intrductin intrduces the requirements and applicatin material in the cntext f the cnceptual framewrk. Requirements: Emphasize the need t apply the cnceptual framewrk in rder t cmply with the fundamental principles; r Set ut the applicatin f the cnceptual framewrk t the subject matter addressed, including any specific prhibitins that may arise. Applicatin material prvide guidance t assist in cmplying with the requirements. Hw t Use This Cde 5. The Cde applies t all prfessinal accuntants in the perfrmance f prfessinal activities. It requires cmpliance with the fundamental principles f prfessinal ethics. 6. The use f the wrd shall in this Cde impses a requirement n the prfessinal accuntant r firm t cmply with the specific prvisin in which shall has been used. Cmpliance is required unless an exceptin is permitted by this Cde. Requirements are designated with an R. 7. In additin t requirements, the Cde cntains intrductry and applicatin material, and a glssary, that prvide cntext relevant t a prper understanding f the Cde. In particular this material explains mre precisely what a requirement means r is intended t cver and includes examples f relevant facts and circumstances. While such material des nt f itself impse a requirement, it is relevant t the prper applicatin f the requirements f the Cde. The entire text f the Cde, Cmmented [EH16]: Cmmented [EH17]: Cmmented [EH18]: New paragraph Page 2 f 5

3 Structure f the Cde Preface and Guide t the Cde therefre, is relevant t understanding and prper applicatin f the Cde s requirements. Applicatin material is designated with an A. 8. Applicatin material that cntains the phrases generally necessary, recmmended r encuraged, indicates that the prfessinal accuntant shuld use prfessinal judgment in cnsidering when the applicatin material is apprpriate fr implementatin. 9. A prfessinal accuntant may be faced with an ethical dilemma that presents a challenge t cmpliance with the fundamental principles. Material related t addressing such an ethical dilemma is included as Appendix Nn-authritative guidance is available n the IESBA website ( t assist in understanding and applying the Cde. Cmmented [EH19]: New paragraph Cmmented [EH20]: New paragraph Cmmented [EH21]: New paragraph Page 3 f 5

4 Structure f the Cde Preface and Guide t the Cde Appendix 1 Addressing Ethical Dilemmas 1. An ethical dilemma presents a challenge t cmpliance with the fundamental principles. Taking apprpriate measures t reslve the dilemma assists a prfessinal accuntant t address such a challenge s as t remain in cmpliance with the fundamental principles. 2. Apprpriate measures t address an ethical dilemma might include: Cmmented [EH22]: Cmmented [EH23]: (a) (b) (c) (d) Cnsidering the cnsequences f each pssible curse f actin; Determining the apprpriate curse f actin; If the matter invlves a cnflict with, r within, an rganizatin, determining whether t cnsult with thse charged with gvernance f the rganizatin; and If, after exhausting all relevant pssibilities, the ethical dilemma is unreslved: Cmmented [EH24]: Cmmented [EH25]: Cmmented [EH26]: (i) (ii) Refusing t remain assciated with the matter creating the dilemma where pssible; and Determining whether in the circumstances it is apprpriate t withdraw frm the engagement team r specific assignment r resign frm the engagement, the firm r the emplying rganizatin. 3. The fllwing factrs, individually r with thers, may be relevant t the reslutin prcess: Cmmented [EH27]: (a) (b) (c) (d) (e) Relevant facts. Ethical issues invlved including the fundamental principles. Established internal prcedures. Cnsulting ther apprpriate peple within the firm r emplying rganizatin. Alternative curses f actin. 4. It is usually in the best interests f the prfessinal accuntant t dcument the substance f the issue, the details f any discussins held, and the decisins made. 5. When a prfessinal accuntant encunters unusual circumstances in which the applicatin f a specific requirement f the Cde wuld result in a disprprtinate utcme r an utcme that may nt be in the public interest, it is recmmended that the prfessinal accuntant cnsult with a member bdy r the relevant regulatr. 6. If a significant dilemma cannt be reslved, advice frm the prfessinal bdy r frm legal advisrs is likely t be helpful. The prfessinal accuntant can generally btain guidance n ethical issues withut breaching the fundamental principle f cnfidentiality by discussing the matter: with the prfessinal bdy n an annymus basis; r with a legal advisr under the prtectin f legal privilege. 7. Instances in which the prfessinal accuntant may cnsider btaining legal advice vary. Fr example, a prfessinal accuntant may have encuntered a fraud, the reprting f which culd breach the prfessinal accuntant s respnsibility t respect cnfidentiality. Obtaining legal advice in that instance will assist in determining whether there is a requirement t reprt. Cmmented [EH28]: Cmmented [EH29]: Cmmented [EH30]: Cmmented [EH31]: Page 4 f 5

5 Structure f the Cde Preface and Guide t the Cde Appendix 2 Structure f the Parts f this Cde PART A ALL PROFESSIONAL ACCOUNTANTS Cmpliance with the Cde, Fundamental Principles and Cnceptual Framewrk PART B APPLICATION OF THE CONCEPTUAL FRAMEWORK FOR PROFESSIONAL ACCOUNTANTS IN BUSINESS PART C APPLICATION OF THE CONCEPTUAL FRAMEWORK FOR PROFESSIONAL ACCOUNTANTS IN PUBLIC PRACTICE C1 INDEPENDENCE FOR AUDIT AND REVIEW ENGAGEMENTS C2 INDEPENDENCE FOR OTHER ASSURANCE ENGAGEMENTS GLOSSARY Page 5 f 5