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Page 1 | Proprietary and Copyrighted Information
Part C
Jim Gaa, Chair Part C Task Force
IESBA Meeting
December 2, 2015
New York
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• Oct 2015: IESBA reviewed revised draft of text presented• Dec 2015: Approve Phase I• Jan 2016: Priorities
– TF to restructure and redraft Phase I under new conventions (ex. S350/260)
– Phase II
• TF to consider applicability of Part C to PAPPs
• TF to begin Phase II (issues)
Timeline
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• March 2016: First read of restructured Phase I• June 2016: IESBA to approve close-off Phase I document
– Recommendations to Board re. applicability of Part C to PAPPs
• Sept 2016: First read of s350/260 ED• Dec 2016: Approve s350/260 ED
Timeline
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• “TF considered changing “Employing Organization” to “Organization” to align with NOCLAR
• TF proposed definition of “Employing Organization”: An employing organization is an entity that employs or engages the professional accountant on a contractual or voluntary basis, including in governance, advisory or administrative capacities, to perform professional activities or provide professional services.
“Employing Organization” vs “Organization”
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• PAIB:– “A professional accountant in business may be an employee, contractor,
partner, director (executive or non-executive), owner-manager, or volunteer of an employing organization. …”
Paragraph 300.3
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• “Employing organization”:– “… An employing organization is an entity that employs or engages the
professional accountant on a contractual or voluntary basis, including in governance, advisory or administrative capacities, to perform professional activities or provide professional services. …”
Paragraph 300.3
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• “… Such an entity may be in the private, public, education, or not-for-profit sector. The legal form of the relationship of the professional accountant with the employing organization has no bearing on the ethical responsibilities incumbent on the professional accountant.”
Paragraph 300.3
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• Link between sub-paragraphs:– 2nd sub-paragraph does not clarify that the seniority of a PAIB should be
considered
Revised Paragraph 300.5
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• Cross Reference to para 300.5, Board Member suggestions:– Reconsider position of cross reference in section 320
– Consider adding cross reference to Section 370
• TF suggests 2 options:1. Add cross references at end of Sections 320 and 370 (see 6-A)
2. Restructure Section 300 to have introductory section and key provisions section that are applicable to all of Part C (see 6-B)
Revised Paragraph 300.5
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• Conflict of Interest– Last sentence in 4th bullet of 370.5
• Board member comment: Could be interpreted that PAIB must ensure replacement does not have same conflict
– TF proposed solutions:
• PAIB responsibility ends when removed from situation
• PAIB must not have reason to believe replacement has same conflict
Section 370
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• Consequential and Conforming Changes (Agenda Item 6-H)– No comments
• Due Process Matters:– Significant matters addressed (see Agenda Items 6-A and 8)
– Need for Further Consultation – IESBA CAG supports changes
– Need for Re-Exposure - Changes due to comments to ED
Other
