IESBA Strategy Survey 2014 2016 Ken Siong IESBA

IESBA Strategy Survey 2014 -2016 Ken Siong, IESBA Technical Director IESBA CAG Meeting April 10, 2013 New York Page 1 | Confidential and Proprietary Information

Overview of Responses • Survey distributed electronically to 700+ stakeholder contacts – 115 responses were received Respondents Regulators by Perspective & Oversight Bodies 7% Other 36% IFAC Member Body 28% Professional Accountant 29% Page 2 | Confidential and Proprietary Information

Overview of Responses Stakeholder Group Regulators and audit oversight bodies # Responses Percentage 8 7% Users of financial statements 12 10% Standard setters 12 10% Academia 4 4% Professional accountants in business 4 4% Professional accountants in government 2 2% Professional accountants in public practice 27 24% Representative of an IFAC member body 32 28% Other 14 11% Total 115 100% Page 3 | Confidential and Proprietary Information

Possible Projects • Most frequently identified issues relate to: – Smaller enterprises, SMPs and non-public entities – Relationships, including independence requirements for component auditors, and ethical requirements for entities that are not audit clients but parents or subsidiaries of audit clients • Other commonly recurring themes include: – Focus on learning, application material, adoption and implementation – Stable platform – Summary of requirements – Ethical issues pertaining to PAIBs – Further emphasis on outreach Page 4 | Confidential and Proprietary Information

Possible Projects – Regulators and Oversight Bodies • Remediation • Enforceability of the Code • Ethical requirements for joint auditors • Ethical requirements relative to non-audit clients that are parents or subsidiaries of audit clients • Auditors’ cooperation with financial markets regulators • How to improve compliance through education and training Page 5 | Confidential and Proprietary Information

Relative Prioritizations of Identified Items – Top 5 # Project or Initiative % Ranking as Important / Very Important 1. Structure of the Code 76% 2. Guidance for PAs in public practice providing non-assurance services 74% 3. Guidance on meaning of the public interest 74% 4. Linkage between ISAs and the Code 73% 5. Preparation of accounting records and financial statements for an audit client 63% Page 6 | Confidential and Proprietary Information

Relative Prioritizations of Identified Items – Others # Project or Initiative % Ranking as Important / Very Important 6. Disclosure of compliance with ethical requirements in auditors’ reports 59% 7. Guidance on reasonable and informed third-party test 58% 8. Guidance on objectivity when independence is not required 54% 9. Independence requirements for PAs not in public practice who perform assurance engagements 51% Page 7 | Confidential and Proprietary Information

Adoption and Implementation – Most Common Ideas • Development of application and implementation resources • Improving the content of the Code • Understand address issues relevant to SMEs/SMPs • Enhance communication initiatives, including: – Thought leadership – Roundtables Page 8 | Confidential and Proprietary Information

Adoption and Implementation – Other Ideas • Work with academic community to undertake research • Liaise with academics to add accounting material to curricula • Work with the IFAC Advisory Compliance Panel • Implement support structures for non-English speaking • Simplify standard-setting process • Institute a stable platform to allow IFAC member bodies and firms time to implement the Code Page 9 | Confidential and Proprietary Information

Convergence – Various Suggestions • Place additional emphasis on more countries adopting the Code • Perform analysis of reasons for differences between the Code and national requirements • Analyze efforts of IFAC member bodies to implement the Code • Better coordination between the IESBA and IAASB • Coordinate with INTOSAI • Scope Sections 290 and 291 out of the independence requirements to facilitate convergence • Develop clear guidance on meaning of convergence and it would take to achieve it Page 10 | Confidential and Proprietary Information

Forward Timeline • NSS discussion May 2013 • IESBA consideration of survey input and draft consultation paper June 2013 • CAG discussion September 2013 • IESBA approval final strategy December 2013 Page 11 | Confidential and Proprietary Information