Welcome to Professionalism

Issue 42

In this issue we provide updates on APESB's activities and technical projects for
April to June 2024.

APESB Thought Leadership Dinner Event with
IESBA Chair Gabriela Figueiredo Dias

On 9 May 2024, APESB hosted a thought leadership event, with the keynote address delivered by International Ethics Standards Board for Accountants (IESBA) Chair Gabriela Figueiredo Dias. The event was held in Melbourne with around 80 guests in attendance. The attendees were diverse and included representatives from professional accounting bodies, firms, regulators, standard setters, academia, the public sector and industry.

Gabriela provided a keynote address on critical role of ethics in the success of global businesses, and the ethical journey for accountants, including present and future challenges for the profession. Gabriela also talked about IESBA’s recent advancements in ethics relating to technology, tax planning and sustainability. The keynote speech and videos of the event are available on APESB's website. 

IESBA Outreach in Australia

Amending Standard for Technology-related revisions to the Code

In June 2024, APESB issued an Amending Standard to APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (APES 110) for Technology-related revisions. 

The revisions incorporate technology-related considerations into the fundamental principles, with new application material added on identifying and managing complex circumstances. The amendments align with the IESBA’s revisions to the IESBA Code. The revisions also clarify the independence requirements for firms and network firms as to whether technology-related non-assurance services can be provided to audit or non-assurance clients.

The amending standard will be effective from 1 January 2025.

Read the Standard, the Technical Update and the Basis for Conclusions.

Exposure Drafts Open for Comment

APESB is seeking stakeholder feedback on three exposure drafts:

Proposed revisions to APESB pronouncements for Code Conforming Amendments (ED 01/24)

ED 01/24 proposes conforming amendments to: 

• APES 210 Conformity with Auditing and Assurance Standards
• APES 215 Forensic Accounting Services
• APES 225 Valuation Services
• APES 305 Terms of Engagement
• APES GN 20 Scope and Extent of Work for Valuation Services

The revisions ensure alignment with the updated APES 110, particularly for the Amending Standard on Technology-related revisions and include updated cross-references and definitions and other editorials to ensure consistency across the suite of APESB pronouncements. Stakeholder comments are requested by 14 August 2024.

Read the Technical Alert and the Exposure Draft.

Proposed amendments to APES 220 Taxation Services (ED 02/24)

ED 02/24 proposes amendments to APES 220 Taxation Services to incorporate proposed Tax Planning and Related Services amendments to APES 110, and to address matters on the APESB Issues Register relating to quality management-related conforming amendments and revised guidance issued by the Tax Practitioners Board (TPB) regarding supervisory arrangements. Stakeholder comments are requested by 27 September 2024.

Read the Technical Alert and the Exposure Draft.

Proposed revisions to APES 110 for Tax Planning and Related Services (ED 03/24)

ED 03/24 proposes amendments to APES 110 to maintain alignment with the IESBA Code, with new Sections 280 and 380 for Members in Business and Members in Public Practice in identifying and evaluating threats to the fundamental principles when engaging in tax planning and related services. Stakeholder comments are requested by 4 October 2024.

Read the Technical Alert and the Exposure Draft.

APESB June 2024 Board Meeting

APESB held its quarterly Board meeting on 26 June 2024. The Board approved three Exposure Drafts relating to Revisions to APES 110 for Tax Planning and Related Services, APES 220 Taxation Services and Revisions to APESB pronouncements for Code Conforming Amendments. The Board also discussed updates on sustainability, client monies, reporting of breaches provisions and parliamentary inquiries relating to the accounting profession. 

In a video clip posted on LinkedIn, Channa Wijesinghe, APESB’s CEO, provides an overview of key decisions made and projects discussed at this meeting, or you can read the highlights of the June 2024 Board meeting here. 

Recent APESB Submissions

Treasury Consultation Paper on Regulation of Accounting, Auditing and Consulting Firms in Australia

In June 2024, APESB made a submission to the Treasury’s consultation paper on the regulation of accounting, auditing and consulting firms in Australia.  APESB believes that the regulation of each service category provided by a firm requires individual consideration and that a strong monitoring and enforcement regime could ensure a robust framework of professional and ethical standards to address ethical issues effectively. The submission will be made available on the APESB website once Treasury publish the submissions.

IESBA Exposure Draft on Using the work of an External Expert

On 3 May 2024, APESB made a submission to the IESBA’s exposure draft Using the work of an External Expert. APESB supported the proposed revisions to enhance the credibility of professional activities performed by professional accountants and sustainability assurance practitioners involving the use of external experts. APESB suggested some refinements to requirements and additional guidance in clarifying how to implement the proposals in practice.

IESBA Exposure Draft on Sustainability

On 30 May 2024, APESB made a submission to the IESBA’s exposure draft on Proposed International Ethics Standards for Sustainability Assurance (including International Independence Standards) (IESSA). APESB supported the establishment of robust independence standards of ethical conduct to apply to all sustainability assurance engagements regardless of the profession of the assurance provider. APESB also recommended IESBA to develop additional guidance across the new Part 5 to assist sustainability practitioners in the practical application of the IESSA and clarify the independence considerations relevant to Value Chain Entities.

International Developments

IESBA Board Meetings

IESBA held a Board meeting in person in New York between 10-13 June 2024. APESB CEO Channa Wijesinghe attended these meetings in his capacity as an IESBA Board Member.

During the meeting, the IESBA received an update on the outreach activities of the Firm Culture and Governance Working Group. Channa, as Chairman of this Working Group, led the discussions and briefly discussed the preliminary observations.

The Board also received an update on the Collective Investment Vehicles, Pension Funds and Investment Company Complexes projects and an overview of the feedback received on the exposure drafts for Sustainability and Use of Experts. Click here for the Board Meeting Papers.

The next IESBA Board meeting will be held on 16-20 September 2024 in New York.

IESBA launches First Global Ethics Standards on Tax Planning

On 15 April 2024, the IESBA released its global standard on ethical considerations in tax planning and related services, which will be incorporated into the IESBA Code. The standard strengthens the ethical framework that guides professional accountants providing tax planning services, and other providers are strongly encouraged to follow it. The framework includes a new requirement and guidance on due consideration of reputational, commercial, and wider economic consequences when providing tax advice. The standard becomes effective globally on 1 July 2025. Further details are available in the IESBA’s media release.

On 13 May 2024, APESB CEO Channa Wijesinghe, in his capacity as an IESBA Member and Tax Planning Services Taskforce Member, presented at the IESBA interactive global webinar to provide an overview of the first global ethics standards on tax planning and related services. Click here for the IESBA’s webinar.

IESBA releases 4-Year Strategy and Work Plan

On 11 April 2024, the IESBA released its Strategy and Work Plan for 2024-2027 (SWP) Towards a More Sustainable Future: Advancing the Centrality of Ethics.

The SWP sets out the IESBA's vision, strategic goals, and actions, underpinning its ambition to make the IESBA Code the heart of businesses and organisations. Within the SWP, the IESBA identified two high-priority strategic areas of focus being accounting firm culture and governance and exploring the opportunity to extend the impact of the Code beyond the accountancy profession to a wider array of individuals who perform similar work as professional accountants.

Further details are available in the IESBA’s media release.

Recent APESB Presentations

NZAuASB

On 3 April 2024, IESBA Member and APESB CEO Channa Wijesinghe made a presentation to the New Zealand Auditing and Assurance Standards Board (NZAuASB) on firm culture and governance, including an update on developments in Australia and the proposed IESBA workstream on this topic.

CA ANZ Audit Conference 2024

On 15 May 2024, APESB CEO Channa Wijesinghe presented at the CA ANZ Audit Conference 2024 on Understanding Auditor Independence under the Code. The presentation covered independence requirements for group audit team members, Technology-related revisions to the Code, definitions of Listed Entities and Public Interest Entities, and the latest developments in the IESBA’s Sustainability Project. Click here for the APESB's presentation.