The International Ethics Standards Board for Accountants (IESBA)
has issued proposals to amend its Code of Ethics for
Professional Accountants.
The IESBA proposes to provide more
comprehensive guidance in identifying, evaluating, and managing
conflicts of interest as well as additional guidance to
professional accountants in business and in public practice
concerning conflicts of interest.
The standard setter thinks the approach taken
by a professional accountant in public practice and a professional
accountant in business should be broadly similar. But the proposal
recognises that conflicts of interest will typically arise in
different circumstances for accountants in public practice,
particularly because a conflict of interest may arise from
professional services provided by other members of the accountant’s
firm.
The proposed guidance also calls for
professional accountants in business to be alert to interests and
relationships that a reasonable and informed third party would be
likely to conclude might compromise compliance with the fundamental
principles. The IESBA said the proposal would strengthen the
guidance on “threats created by compensation and incentive
arrangements”.
IESBA chairman Ken Dakdduk said the changes
should assist professional accountants in early identification of a
potential conflict of interest and prompt accountants to evaluate
their ability to be objective in that situation and meet the other
fundamental principles in the IESBA code”.
“From the perspective of the public, timely
identification of potential conflicts of interest can provide
affected parties with more time to engage an alternative service
provider,” Dakdduk explains.
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By GlobalDataDeadline to comment on the proposals is 31
March 2012.
