International Ethics Standards Board for Accountants Releases New Code to strengthen audit independence
14 July 2009
The increase in trust and certainty that flow from familiarity with standards will contribute immeasurably to a reduction in barriers to international capital flows.
International Ethics Standards Board for Accountants Releases New Code, Clarifies Requirements and Strengthens Independence.
The revised Code, which takes effect on January 1, 2011, includes the following changes to strengthen independence requirements:
· Extending the independence requirements for audits of listed entities to all public interest entities;
· Requiring a cooling-off period before certain members of the firm can join public interest audit clients in certain specified positions;
· Extending partner rotation requirements to all key audit partners;
· Strengthening some of the provisions related to the provision of non-assurance services to audit clients;
· Requiring a pre- or post-issuance review if total fees from a public interest audit client exceed 15% of the total fees of the firm for two consecutive years; and
· Prohibiting key audit partners from being evaluated on or compensated for selling non-assurance services to their audit clients.
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