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Structure of the Code

Structure of the Code. Don Thomson, Working Group Chair IESBA Meeting June 10-12 2013 New York, USA . Background. Some stakeholders have expressed concern about usability, including understandability and enforcement This may be impacting adoption and implementation

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Structure of the Code

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  1. Structure of the Code Don Thomson, Working Group Chair IESBA Meeting June 10-12 2013 New York, USA

  2. Background • Some stakeholders have expressed concern about usability, including understandability and enforcement • This may be impacting adoption and implementation • Board focused on issue in 2012; formed Working Group • Board discussed WG's preliminary thoughts in March 2013 • Input also received from CAG, National Standard Setters (NSS) Group, individual standard setters, IFAC SMP Committee and Strategic Review respondents

  3. General Input Received to Date • Widespread, strong support • Perform research before undertaking initiatives • Discussion with standard setters welcomed • Similar initiatives by certain standard setters may provide insights • Timing should be influenced by the research findings • Importance and urgency • Also consider relative priorities, available resources, change management

  4. Proposed Terms of Reference (8-A Appendix A) • Objective: Identify and recommend to the Board ways to improve the usability of the Code, thereby facilitating adoption or convergence, effective implementation and consistent application • Perform research; communicate with stakeholders • Focus in particular on drafting conventions, format, structure and delivery media • Report findings and recommendations to the Board

  5. Proposed Terms of Reference: IESBA members are asked to approve • The Working Group’s proposed Terms of Reference

  6. Research Plan • Research will address concerns related to the structure of the Code impacting adoption, convergence and/or implementation, including • Impediments to the identification of specific individuals within a firm responsible for actions related to independence (Responsibility) • Impediments to the identification of requirements and prohibitions separately from application guidance (Visibility) • Impediments to understandability, such as the length and complexity of sentences, style of wording and structure of the Code • Impediments to translation

  7. Research Plan • Research will address the extent to which the following suggestions would enhance the usability of the Code • The development of an electronic Code • Other forms of delivery media, such as short summaries of the Code • Complementary materials to facilitate comprehension of the Code • e.g. questions and answers, case studies • Repackaging the Code, for example, separating out the Code into more distinct sections / booklets • e.g. ethics and independence

  8. Research Plan • Research is expected to include • CAG; NSS; SMP and PAIB Committees • Interviews with selected representatives of member bodies, regulators and standard setters from all continents (currently planning 11 plus FEE) • FEE have offered to assist with European perspective • Include a selection of jurisdictions that have adopted the Code • Respondents to Strategic Review survey, including IOSCO • Other standard setters (IAESB, IAASB) • May be supplemented by a consultation paper and additional research by Compliance Advisory Panel staff

  9. Research Plan IESBA members are asked for views on • The research plan

  10. Possible Short Term Initiatives • Plain English Style Guide • Encouraging the use of plain English • Discouraging long and complex sentences • High level summaries • Hyperlinks for an electronic Code • Project addressing responsibility • Facilitating identification of responsibility for complying with specific requirements and prohibitions in the Code

  11. Short Term Initiatives IESBA members are asked for views on: • Whether resources should be committed to short term initiatives before the preliminary research has been completed • The merits of the four short term initiatives identified

  12. Tentative Timeline • September 2013: Status report • December 2013: Preliminary report on research findings • April 2014: Final report on research findings • Including recommendations to the Board • Short- and longer-term initiatives • Input to assist the Board in establishing timelines • Consider a consultation paper on longer-term elements • July 2014: Final draft consultation paper

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