ThinkTWENTY20

According to former IESBA Chairman, Dr. Stavros Thomadakis, the years 2020-21 have witnessed high IESBA productivity, culminating in major strides in the International Independence Standards, as well as a deeper dive into the broader ethical mindset expected of professional accountants.

The report Elevating Ethics and Independence Standards for a Complex World, published May 4, 2022, summarizes the accomplishment of the International Ethics Standards Board for Accountants for 2020 and 2021. The report includes the final message from Dr. Stavros Thomadakis in his role as IESBA Chairman and showcases the significant progress that the IESBA has made on behalf of the public interest. It also provides an overview of the IESBA’s extensive stakeholder outreach efforts and information about the Board’s partnership with IFAC to promote awareness, adoption, and effective implementation of the Code.

In the Foreword to the publication, Thomadakis says that standard-setting work has been heavily influenced by the Covid-19 pandemic. “We have been able, thanks to members, staff, and technical support from IFAC, to adjust operations and work processes, seeking to maintain the energy, communicative intensity and lively deliberation required by our global mandate. Pivoting to digital meetings, we have upheld trust, collegiality and high cooperation. The results have been rewarding: maintenance of Board cohesion, on one hand; successful attainment of planned goals for 2021, on the other.”

The impact of Covid-19 has not affected only practical operations, he writes. “The health crisis has brought to the forefront the criticality of ethical behavior, as pillar of the public interest. This has added meaning, purpose and momentum to IESBA’s work. Most prominent exhibits have been the ‘thought pieces’ and ‘guidance papers’ about ethical responses to the crisis that IESBA has sponsored and prepared in collaboration with major national standard setters of the world.”

The bundle of new pronouncements enhancing auditor independence are a prominent milestone presented in this report, Thomadakis writes, citing new provisions on permissibility of non-assurance services (NAS) offered to audit clients, the transparency of audit and non-audit fees, and the limitation of fee dependence cover new ground, advancing substantially auditor independence in both fact and appearance.

These enhancements retain a principles-based character that makes them resilient to innovation in services in future. Best example, according to Thomadakis, “is the prohibition of NAS that might create a self-review threat, covering newly generated future services arising from technological or institutional change. Future-proofing is also evident in our revised definition of Public Interest Entity (PIE) for application of higher independence standards: expanding boundaries to include banks, insurers and all entities traded in public markets; and supplementing those by first-time guidance to national standard setters about determining PIEs in their jurisdictional circumstances and dynamics now and in future.”

Thomadakis concludes that the IESBA “is in a strong position to tackle challenges of the future. The application of ethics to the whole new area of reporting and assurance of nonfinancial information is one. The continuous work of assimilating ethical implications of rapid technological change is another. I am confident that under the new organizational scheme, as contemplated in the reforms of the Monitoring Group, the Board will rise to higher accomplishments in these and many other areas.”

For the actual reportage of what the IESBA has accomplished in the past two year, as well as a look to the future, download the report at IESBA-Report-on-Accomplishments-2020-2021.pdf (ifac.org).