Additional Comments Sought
International Federation of Accountants (IFAC)’s Ethics Committee is seeking more comments on a recently revised exposure draft (ED) on independence. The revised ED, Independence Proposed Changes to the Code of Ethics for Professional Accountants, released recently, clarifies certain points made in the initial ED, issued in June 2000, and expands the guidance on circumstances creating threats to independence. It establishes a framework for independence requirements for assurance engagements that, if adopted, will be the international standard on which national standards should be based. Accordingly, no member body or firm would be allowed to apply less stringent standards that those stated in the revised ED. Comments are due by June 30, 2001.
The initial June 2000 exposure draft proposed a move to a conceptual framework approach that would require the identification and evaluation of threats to independence and the application of safeguards to reduce any threats created to an acceptable level. Respondents were strongly supportive of this approach and suggested that additional examples be added. The revised ED includes such examples.
The revised ED also expands the class of people that may create threats to independence. As with the June exposure draft, immediate and close family members may create threats to independence; however, the revised ED also discusses threats to independence that may be created by individuals who are not part of the assurance team, such as other partners and professional staff within the firm, and the firm itself.
This revised ED may be downloaded from the IFAC web site (http://www.ifac.org). Comments may be sent via e-mail to EDComments@ifac.org or mailed or faxed +1 (212) 286 9570 to the Technical Director’s attention at the Secretariat.