Today, the staff of the International Ethics Standards Board for Accountants (IESBA) released an updated Questions & Answers (Q&A) publication. This updated IESBA staff Q&A publication introduces two revisions:
- A new question and answer addressing the scenario where a jurisdiction either lacks a PIE definition or has excluded one or more of the mandatory categories in the IESBA PIE definition.
- An amendment to align with the revisions to ISA 700 (Revised) arising from Track 1 of the IAASB’s project to use the auditor’s report to enhance transparency about the relevant ethical requirements for independence applied for certain entities, such as PIEs, when performing an audit of financial statements.
The IAASB and IESBA have worked closely together throughout their respective Listed Entity and Public Interest Entity (PIE) projects. Track 1 of the IAASB’s project was completed in June 2023 and Track 2 is ongoing. Among other project objectives, Track 2 aims to achieve convergence to the greatest extent possible between the boards’ PIE definitions and key concepts.
Considering the importance of the interoperability of IAASB and IESBA standards, the IAASB PIE project team has incorporated the clarified IESBA position reflected in 1 above into its deliberations. The IAASB will consider different options for Track 2 at the September 2024 IAASB meeting.
The IAASB’s narrow scope revisions to ISA 700 (Revised) and 260 (Revised) arising from Track 1 of its project will become effective for audits of financial statements for periods beginning on or after December 15, 2024, coinciding with the effective date of the PIE definition changes in the IESBA’s International Code of Ethics for Professional Accountants (including International Independence Standards).