IESBA proposes ethics code revisions for use of tech


The International Ethics Standards Board for Accountants proposed a set of revisions Friday to the International Code of Ethics for Professional Accountants (including International Independence Standards to address the impact of technology innovation on the profession.

The exposure draft with proposed technology-related revisions to the ethics code aims to guide the mindset and behavior of accountants in business and public practice as they deal with technological changes in their work and the services they provide.

Technology innovation has led to vast repercussions across society, and the accounting profession has struggled to keep pace with rapid advances. The past two years has seen an increase in accountants and auditors working remotely from home as they practice social distancing during the pandemic, and that has affected the way they interact with clients and their own organizations.

“Technological innovation is transforming the world of business and professional services in ways we would never have imagined even a decade ago,” said IESBA chair Ms. Gabriela Figueiredo Dias in a statement Friday. “Technology is not neutral, and professional accountants’ working relationship with it must be shaped by ethics. These timely proposals are designed to emphasize and strengthen the ethical principles that should guide them as they navigate the challenges and take advantage of the opportunities created by these developments, recognizing ultimately their responsibility to act in the public interest.”

The proposals call attention to the professional competence and confidentiality imperatives of the digital age, and address the ethical dimension of professional accountants’ reliance on, or use of, the output of technology in carrying out their work. The proposals would further enhance considerations by accountants pertaining to threats from the use of technology as well as considerations relating to complex circumstances in applying the conceptual framework in the ethics code. The revisions would strengthen and clarify the International Independence Standards (IIS) when it comes to technology-related non-assurance services (NAS) that firms may provide to their audit clients or technology-related business relationships they may enter into with their audit clients. The new rules would explicitly acknowledge that the IIS that apply to assurance engagements are applicable to assurance engagements on non-financial information, such as environmental, social, and governance (ESG) disclosures.

IESBA developed the proposals after extensive research and outreach to stakeholders. They build on some of the earlier revisions that took effect last December, and the revised NAS provisions become effective in December 2022.

IESBA is asking all its constituents to comment on the exposure draft by visiting the IESBA website by June 20, 2022.

IFAC offices

Courtesy of IFAC

Separately, on Thursday, the International Auditing and Assurance Standards Board, which like IESBA is affiliated with the International Federation of Accountants, released a First-time Implementation Guide for ISA 220, Quality Management for an Audit of Financial Statements. The guide aims to help accountants and auditors understand the quality management standards and properly implement their requirements. The guide could be used alongside some previously released implementation guides for International Standard on Quality Management (ISQM) 1 and 2 to help accountants implement the IAASB’s quality management standards. The ISQM standards were released in December 2020 and take effect Dec. 15, 2022.

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