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Definition of “those charged with governance” clarified by IESBA

The International Ethics Standards Board for Accountants (IESBA) has clarified the definition of "those charged with governance" in its Code of Ethics for Professional Accountants.

The move follows the need to more closely align it with the definition found in the International Auditing and Assurance Board's (IAASB) ISA 260, Communication with Those Charged with Governance.

The changes clarify that a subgroup of those charged with governance of an entity, such as an audit committee, may assist the governing body in meeting its responsibilities.

In such cases, the code will require professional accountants or firms that wish to communicate with such a subgroup to determine whether communication with all of those charged with governance is also necessary so that they are adequately informed.

The IESBA said it does not expect any changes will be necessary to accounting firms' systems and methodologies or common practice.

IEABA chair Jörgen Holmquist, who recently spoke to The Accountant, said "by clarifying the definition, the IESBA aims to promote more consistent application of the code."

The changes will be available in the 2014 Handbook of the Code of Ethics for Professional Accountants, and will be effective from 1 July 2014.

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