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IESBA Releases Guide on Proportionality of the IESBA Code

The International Ethics Standards Board for Accountants (IESBA) has released a guide to its approach to proportionality in the ethics and independence standards in the IESBA Code. The publication entitled “Proportionality of the IESBA Code” aims to support all professional accountants, and especially small and medium practices (SMPs), in understanding how the Code maintains a universal high ethical bar while employing proportionality mechanisms embedded in its design.

The publication explains how these proportionality mechanisms work in practice across three key dimensions:

  1. The Code’s conceptual framework, which requires professional accountants to identify, evaluate, and address threats to the fundamental principles and, where applicable, to independence, is inherently scalable. It does not prescribe a uniform approach to identifying and evaluating threats; it requires careful consideration of the relevant facts and circumstances, including interests and relationships;

     

  2. The Code’s building-blocks architecture, which means that practitioners apply only the parts of the Code relevant to their role and the professional activities or services they perform, avoiding unnecessary burden while preserving rigor;

     

  3. Clearly differentiated provisions, especially regarding the Code’s independence standards, which are calibrated to the level of public interest at stake, with more stringent requirements applying only where the level of public interest in the engagement and the public reliance on the information are highest.

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