IAASB and IESBA adjust strategic work plans

The International Auditing and Assurance Standards Board and the International Ethics Standards Board for Accountants both published new strategic plans for the next few years Thursday in coordination with each other.

The two standard-setting boards, which are both overseen by the Public Interest Oversight Board and affiliated with the International Federation of Accountants, work closely together. The IAASB Strategy and Work Plan for 2024-2027 includes completing the board’s priority audit and assurance projects, with an emphasis on fraud, going concern and sustainability assurance.

The IAASB also plans to embark on new initiatives and projects, such as focusing on supporting the adoption and implementation on its overarching standard for sustainability assurance engagements, establishing an IAASB Technology Position, and conducting post-implementation reviews, as well as standard setting on projects such as audit evidence and risk response, materiality, and reviews of interim financial information.

The IAASB also plans to continue collaborating with the IESBA, regulators, standard-setters and other stakeholders. It’s also engaging with regulatory and standard-setting partners to strengthen trust in markets globally, as well as further implementing the Monitoring Group’s recommendations to enhance independence and accountability in standard-setting. The Monitoring Group of international financial regulators and financial institutions set up a new oversight body for both the IAASB and IESBA last year called the International Foundation for Ethics and Audit. The Monitoring Group issued a set of recommendations in 2020 urging more of a separation between IFAC and its standard-setting boards so they would be less beholden to the major accounting and auditing firms and organizations (see story). 

The IAASB’s previous strategy (2020-2023) made progress on a number of objectives, including adopting agile methodologies and engaging with a broader range of stakeholders. Its achievements included a set of quality management standards, an enhanced special considerations standard for audits of group financial statements, the International Standard on Auditing for Audits of Financial Statements of Less Complex Entities (known as the ISA for LCE), and developing a proposed standard for sustainability assurance engagements, among other achievements. The new strategy for 2024-2027 reaffirms the IAASB’s commitment to serving the public interest by developing globally accepted audit, review and other assurance standards.

“Audit and assurance play vital roles in the world’s economies,” said IAASB chair Tom Seidentstein in a statement. “At their best, audit and assurance practitioners enhance trust in markets and assist in efficient, sustainable resource allocation. That is why the IAASB is dedicated to developing relevant, high-quality standards under a rigorous and transparent due process.”

The IAASB’s partner board, IESBA, also issued its strategy and work plan for 2024-2027. One of its high-priority strategic areas of focus includes accounting firm culture and governance, identifying potential actions the IESBA might take within or outside its ethics code to respond to persistent high-profile cases of unethical behavior in accounting firms. IESBA also plans to explore the opportunity to extend the impact of the ethics code beyond the accounting profession to a wider range of people who perform similar work as accountants, building on its current project to develop profession-agnostic ethics, including independence, standards for all sustainability assurance practitioners. Among other matters, this will include a new workstream to explore expanding the scope and applicability of the ethics code beyond professional accountants to all preparers of sustainability information.

“Putting ethics at the center of every business judgment and decision is the surest way to earn, restore and strengthen public trust in all that an organization does,” said IESBA chair Gabriela Figueiredo Dias in a statement. “The external landscape continues to evolve, presenting new dynamics and challenges, but good ethical behavior acts as a constant amidst the uncertainty.”

Other key highlights of IESBA’s strategic work plan include new initiatives to explore ethical considerations relating to the evolving role of CFOs and other senior accountants in business, and independence considerations relating to business relationships between firms and their audit clients. IESBA also intends to do a series of post-implementation reviews for significant ethics, including independence standards it has issued in recent years.

IESBA is also doing ongoing monitoring of technological transformations and their impact on the professional activities and services performed by accountants and others to see whether there are any further standard-setting or other actions the IESBA might take in the public interest.

IESBA also reiterated its commitment to closely coordinating with the IAASB and fostering collaborative relationships with other standard-setters to ensure standards interoperability.