Welcome to Professionalism

Issue 39

In this issue we provide updates on our activities and technical projects
for July to September 2023.

APESB August 2023 Board Meeting

APESB held its quarterly Board meeting on 24 August 2023. The Board approved two pronouncements and an Exposure Draft (as detailed below), as well as a new Compiled Code which will incorporate revisions for the definition of Engagement Team and Group Audits.  

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 August 2023 Board meeting here.

Revised APES 225 Valuation Services

On 11 September 2023, APESB issued revised APES 225 Valuation Services (APES 225) which includes amendments to require Members in Business to comply with Section 210 Conflicts of Interests of the Code, and quality management-related conforming amendments in response to the revised Quality Management standards issued by APESB and AUASB.

The revised APES 225 is effective from 1 January 2024, with early adoption permitted.

Read the Standard and the Technical Update.

Revised APES GN 30 Outsourced Services

On 14 September 2023, APESB issued a revised APES GN 30 Outsourced Services (APES GN 30). The key changes include clarifications on the term 'geographical location', quality management-related conforming amendments and the addition of a new example addressing overseas employment contracts.

The revised APES GN 30 is effective from the date of issue and supersedes APES GN 30 issued in June 2021. 

Read the Guidance Note and the Technical Update.

Exposure Draft Open for Comment

Proposed Technology-related revisions to the Code (ED 05/23)

On 1 September 2023, APESB issued exposure draft ED 07/23 which proposed Technology-related revisions to APES 110 Code of Ethics for Professional Accountants (including Independence Standards).

The proposed revisions in the exposure draft align with the IESBA's revisions to the International Code incorporating technology-related considerations into the fundamental principles of Professional Competence and Due care and application material to manage technology-related complex circumstances.

APESB seeks stakeholder comments by 21 October 2023.

Read the Exposure Draft and the Technical Alert.

Updated guidance on prohibitions applicable to Auditors in the Code

On 22 August 2023, APESB issued a revised guidance document APES 110 Code Prohibition applicable to Auditors for all Audit and Review Engagement 2023 which incorporates changes based on the Compiled APES 110 issued in December 2022, particularly amendments resulting from the Fees and Non-Assurance Services revisions. It addresses the new prohibition of providing non-assurance services to public interest entity audit clients if the service might create a self-review threat. 

Read the Revised Prohibition Document here. 

Recent APESB Submissions

PJC Inquiry on Ethics and Professional Accountability

In August 2023, APESB made a submission to the Parliamentary Joint Committee (PJC) on Corporations and Financial Services inquiry into Ethics and Professional Accountability: Structural Challenges in the Audit, assurance and Consultancy Industry. 

In the submission, APESB noted its support for the inquiry. APESB believes the existing regulatory environment is not working and have recommended a package of measures to improve the ethics and accountability of large professional firms.

NSW Government's inquiry into its use and management of consultants

In July 2023, APESB made a submission to the NSW Government's Upper House Public Accountability and Works Committee on the inquiry into the use and management of consulting services by the NSW Government. 

The submission noted the importance of professional and ethical standards. APESB strongly supported regulators and monitoring bodies taking appropriate enforcement and disciplinary action for non-compliance. 

APESB Chairman Ms Nancy Milne OAM and CEO Mr Channa Wijesinghe appeared at a public hearing of this inquiry in August 2023 and presented a preliminary view of measures to improve the current co-regulatory framework. 

Treasury's Consultation Paper on Climate-Related Financial Disclosure

In July 2023, APESB made a submission to the Treasury's Consultation Paper Climate-related financial disclosure June 2023, which sought stakeholder views on the design and implementation of standardised, internationally-aligned climate-related disclosures in Australia.

APESB's submission expressed concern that the consultation paper did not explicitly address the proposed framework for professional and ethical standards. APESB recommended that the Treasury consider the comprehensive requirements in the Code, which could be applied to all those preparing and presenting climate-related information and related assurance reports. 

International Developments

IESBA Board Meetings

The most recent IESBA Board meeting was held via video conference and in person in New York between 18-22 September 2023. APESB CEO, Channa Wijesinghe attended the meeting in his capacity as an IESBA Board Member.

The IESBA made significant progress on its Sustainability and Experts projects and are on track to deliver exposure drafts by the end of 2023, as well as the final pronouncement on Tax Planning and Related Services. Click here for the Board Meeting Papers.

The next IESBA Board meeting will be held on 4-8 December 2023 in New York.

Sustainability-related Developments

International Sustainability Standards Boards (ISSBs) Standards endorsed by International Securities Regulator

In July 2023, the International Organization of Securities Commissions (IOSCO) announced its endorsement of the ISSB standards. The IOSCO have called on its 130 member jurisdictions to consider how they can incorporate the ISSB standards into their respective regulatory frameworks to deliver consistency and comparability of sustainability-related disclosures worldwide.

IAASB issues an Exposure Draft on Sustainability Assurance Standard 

On 2 August 2023, the International Auditing and Assurance Standards Board (IAASB) issued its exposure draft on the proposed International Standard on Sustainability Assurance (ISSA) 5000, General Requirements for Sustainability Assurance Engagements for public consultation with comments due by 1 December 2023. 

The proposed ISSA 5000 will serve as a comprehensive, stand-alone standard suitable for any sustainability assurance engagement. Both accountants and non-accountant assurance practitioners can use it to perform high-quality sustainability assurance engagements.  To complement this release, the Board have also issued Frequently Asked Questions on the proposed ISSA 5000. Read the IAASB Media  Release.

IESBA establishes a Sustainability Reference Group

On 30 June 2023, the IESBA announced the establishment of the Sustainability Reference Group (SRG) to support the work of its Sustainability Task Force. The SRG members will serve as a "sounding board" to the Sustainability Taskforce, providing insights, expertise and guidance in the development of worldwide ethics and independence standards for sustainability reporting and assurance. APESB CEO and IESBA Board Member Mr. Channa Wijesinghe will chair the SRG. Read the IESBA Media Release.