Revisions to the IESBA code of ethics - part 1

In this lesson

1. 0:00 Ethical Standards Board revisions overview
2. 1:31 Non-assurance services and self-review threats
3. 2:22 Prohibited services for public interest entities
4. 3:00 Communication requirements with those charged with governance
5. 5:04 Fee-related provisions and self-interest threats
6. 6:12 Threats, safeguards and fee dependency
7. 8:12 Fee dependency thresholds and external reviews
8. 10:50 Fee disclosure and transparency requirements

About this lesson

This lesson covers what services are now prohibited for public interest entity clients, how to identify self-review threats, and the new communication requirements with those charged with governance. Understanding these changes is essential for the Audit and Assurance module, as they directly shape what work you can and cannot undertake as an auditor and how you manage fee dependency risks. The first part of this revision focuses on non-assurance services. The code now expressly prohibits any non-assurance service that creates a self-review threat—including accounting and bookkeeping, valuation services, and tax calculations for public interest entities. You'll learn how to assess whether a threat exists and what safeguards might mitigate it, and when declining the service or resigning becomes necessary. Crucially, this prohibition applies regardless of materiality to the financial statements. The second part addresses fee-related provisions and fee dependency. You'll discover the thresholds that trigger heightened scrutiny: 30% of firm fee income for five consecutive years (non-public interest entities) or 15% for two consecutive years (public interest entities). The lesson explains the specific safeguards required at each threshold, including external reviews and engagement quality reviews, and when resignation is mandatory. You'll also understand your obligation to communicate fee information to those charged with governance and, in some cases, publicly disclose audit fees to protect stakeholder confidence in your firm's independence.

Duration: 13m