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IAASB Adopts New Publicly Traded Entity Definition Aligned with the IESBA Code of Ethics

The International Auditing and Assurance Standards Board (IAASB) has released narrow scope amendments to its standards revising the definition of listed entity to align with the definition in the International Ethics Standards Board for Accountants’ (IESBA) Code of Ethics for Professional Accountants (including International Independence Standards). The new definition will amend the International Standards on Quality Management and International Standards on Auditing. In addition, amendments to International Standard on Review Engagement 2400 (Revised), Engagements to Review Historical Financial Statements, aim to align with the IESBA Code of Ethics regarding certain public disclosures about the application of independence requirements.

The narrow scope amendments:

  • Adopt the same definition of publicly traded entity (PTE) in the ISQMs and ISAs as adopted in the IESBA Code of Ethics, while recognizing the role local standard setters and regulators play in defining PTEs for their jurisdictions.
  • Incorporate an overarching objective for differential requirements for PTEs in the ISQMs and ISAs and a framework for when it may be appropriate to apply such requirements to other entities.
  • Amend the applicability of the existing requirements for audits of listed entities to apply to audits of PTEs.
  • Add a new requirement in ISRE 2400 (Revised) for public disclosure in the practitioner’s review report when the practitioner applied independence requirements specific to reviews of financial statements of certain entities, e.g., for public interest entities.
  • Become effective for engagements for periods beginning on or after 15 December 2026.

ISCA will undertake the due process to adopt the amendments in Singapore.