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Kim,
Any idea where I can lay my hands on the recent changes made by the IESBA to the code of ethics for professional accountants please?
I am seeing some answers where mgt responsibility can be safeguarded (Technical article) and I am seeing reference to the code change that prohibits auditors from assuming mgt responsibilities (specimen exam Q3a).
Either auditors can or they can’t assume mgt responsibilities and it would be useful to know which…
Thanks in advance!
Short answer. .. never Assume mgt responsibilities. See Iesba pronouncements section of IFAC www . In short safeguards must now be actions relevant to the assignment so cannot be broad procedures within the profession like education and training.
I am happy with the “never assume mgt responsibilities” bit…
What I can’t understand is why some of the solutions give marks for suggesting possible safeguards such as “mgt accept responsibility”, “client takes full responsibility”, “directors confirm in writing that they are responsible” etc if the code prohibits it anyway??
Why safeguard something that’s already safeguarded by prohibition!
The Code of Ethics is principles-based – not rules-based. In a given scenario, there may there are “no safeguards … ” (effectively prohibited) – but perhaps the requested service can be modified so that with safeguards the threat can be overcome. (There wouldn’t be much discussion if everything was black and white with no shades of grey.)
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