The International Ethics Standards Board for Accountants (IESBA) has issued proposals to amend the definition of “those charged with governance” in its Code of Ethics for Professional Accountants.
In its exposure draft, Proposed Change to the Definition of “Those Charged with Governance”, the IESBA has proposed that in each instance when the Code refers to communication by “those charged with governance” the language should be changed to “those charged with governance or a subgroup thereof.”
IESBA wants to reconcile the definition with the one used by the International Auditing and Assurance Standards Board (IAASB) in the standard ISA 260 Communication with Those Charged with Governance.
ISA 260 addresses matters to be communicated by the auditor and provides guidance on who should receive the communication.
The proposed change aims to clarify that the communication may be with a subgroup of those charged with governance, such as an audit committee, and may assist the governing body in meeting its responsibilities.
In those cases, the auditor shall determine with whom within the entity’s governance structure to communicate, IESBA explained.
IESBA hopes the change will assist those who are familiar with ISA 260 by clarifying that the definition in the Code is intended to be the same as in ISA 260.
Deadline for comment is 31 October.