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FRC’s Response to IESBA’s Post-Implementation Review (PIR) Survey - Structure of the IESBA Code
IESBA Post-Implementation Review (PIR) Survey Structure of the IESBA Code
Introduction
This survey is only applicable to respondents that have adopted or use or benefit from the 2018 or later edition of the International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code). Part 5 of the Code as contained in the International Ethics Standards for Sustainability Assurance (IESSA) is outside the scope of this survey and only becomes effective in December 2026.
1The International Ethics Standards Board for Accountants (IESBA) is conducting a post-implementation review of the structure and drafting of the Code.
2This survey seeks to obtain input from a broad range of stakeholders to enable the IESBA to determine: (a) Whether the restructuring of the Code through revising its structure and redrafting its provisions¹ has achieved its intended purpose by identifying: (i) Benefits from the restructuring of the Code; and (ii) Any practical challenges or questions regarding the understandability and usability of the Code, including whether it is being consistently understood and applied; and (b) What actions, if any, are needed by the IESBA to address identified matters.
3The responses received will be analyzed for purposes of providing feedback to the IESBA and in developing recommendations for any actions.
4The survey comment period starts on April 1 and ends on July 3.
Survey Responses to be Made Public
5Unless confidentiality is specifically requested, respondents' submissions will be considered a matter of public record and will be posted to IESBA's website. Where confidentiality is requested, the IESBA Project Team will include such input in its analysis on an anonymized basis.
Survey Instructions
6Respondents to the survey are asked to provide their responses only on the questions applicable to the stakeholder group to which they belong:
- Part A — Demographic Information (All Respondents)
- Part B — General Information (All Respondents)
- Part C — Usability and Clarity of Language and Responsibility (All Respondents)
- Part D — Clarity of Responsibility (Individual Professional Accountants in Public Practice, Accounting Firms, Regulators or Oversight Bodies, Professional Accountancy Organizations)
7Respondents may respond to all questions or only selected questions or matters. All responses to this survey, whether complete or partial, will be accepted and considered as input for the IESBA Project Team's analysis.
8Please read the overview of the structure and drafting enhancements which can be accessed here. The drafting guidelines that were adhered to in restructuring the IESBA Code can be accessed here.
Part A - Demographic Information (All Respondents)
9Please indicate if you are responding as an individual or on behalf of your organization? (a) If you are responding as an individual: N/A (i) Please indicate your jurisdiction (ii) Approximate years of professional experience: - Less than 5 years - 5–10 years - 11–20 years - More than 20 years (b) If you are responding on behalf of your organization, please indicate the geographical profile which best represents your situation, i.e., from which geographical perspective are you providing your responses? - Global - Regional (Please specify) - Multiple jurisdictions (Please specify) - Single jurisdiction (Please specify) United Kingdom
10Please indicate the stakeholder group to which you belong, i.e., from which perspective are you providing your responses? - Jurisdictional standard setters (JSS) (Please indicate the users of your standards as a JSS, e.g., individual Professional Accountants in Public Practice (PAPPs), professional accountants in business (PAIBs) and/or accounting firms) - Professional accountancy organizations (PAOs) (Please indicate whether your members are PAPPs and/or PAIBs) - Regulators or oversight bodies (Please indicate which of the following you regulate or oversee (select all that apply): PAPPs (including auditors), PAIBs, accounting firms (including audit firms), none of the above)
The FRC is the UK's oversight body for audit firms and of the recognised professional bodies for accountants.
11Please provide the following information and other contact information: - Your organization's name, if any (if you are responding on behalf of an organization²) Financial Reporting Council - Your name and job title / role James Ferris, Director of Audit Policy - Your email address [email protected] - Your jurisdiction United Kingdom
Part B - General Information (All Respondents)
The revised structure and redrafted provisions of the IESBA Code from the Structure Project were integrated into the 2018 Revised and Restructured IESBA Code (Restructured Code).
Other revisions which were concurrently developed were integrated into the 2018 Restructured Code. Subsequent new or revised standards which were incorporated into later editions of the Code have all been structured and drafted consistently with the enhancements made in the Structure Project.
Accordingly, the following questions seek to understand the adoption status of the Restructured Code (2018 edition and onwards) in respondents' jurisdictions, relevant educational materials and guidance that have been issued or used by respondents, and the inquiries or questions related to the structure and drafting of the Restructured Code that have been commonly received or experienced by respondents.
Note:
In this survey, adoption (full or with modifications) refers to the formal acceptance and incorporation of the IESBA standards into your jurisdiction's national laws, regulations or professional requirements.
Convergence is where a jurisdiction aligns its national ethics (including independence) standards or provisions with the IESBA standards through a process that seeks to eliminate or minimize differences between the IESBA and national standards or provisions. This includes a process where an IESBA standard is used as a basis to develop the local standard or provisions.
Adoption status (Only for respondents that are JSS, PAOs, Regulators or Oversight Bodies, Individual PAPPs or Accounting Firms)
12Has your jurisdiction adopted the Restructured Code (2018 edition and onwards)? (Please choose the most representative answer)
- Yes, through full adoption with no modifications of the Code (Please (i) specify the latest edition of the IESBA Code that has been adopted, e.g., 2018, 2024, etc., and (ii) provide the links to the local Code or the specific announcement of the adoption or issuance of the local Code)
- Yes, through adoption with modifications (Please (i) specify the latest edition of the IESBA Code that has been adopted, e.g., 2018, 2024, etc.; (ii) describe the nature and reasons for the modifications; and (iii) provide links to the local Code or the specific announcement of the adoption or issuance of the local Code)
- No, the IESBA Code was used as a basis to develop the local Code (or equivalent provisions) which is converged with the IESBA Code (Please (i) specify the latest edition of the IESBA Code that has been used to develop the local Code (or equivalent provisions), e.g., 2018, 2024, etc.; (ii) provide links to the local Code (or equivalent provisions) or the specific announcement of the converged version of the IESBA Code); and (iii) describe the significant differences related to structure and drafting between the local provisions and the Code's provisions)
- There are provisions in relevant law or regulation or a different ethical framework that are at least as stringent as the Code's provisions (Please (i) specify the edition of the IESBA Code against which the relevant law, regulation or local ethical framework is benchmarked, e.g., 2018, 2024, etc., and (ii) describe the significant differences related to structure and drafting between the local Code or provisions and the IESBA Code)
- Not adopted (Please specify reasons. If there is a plan to adopt the IESBA Code, please provide details)
In the UK, the IESBA Code is adopted by the recognised professional bodies for accountants as the basis of their code of professional ethics. The FRC does not mandate the International Independence Standards (IIS) for UK audit and assurance engagements and instead issues its own Ethical Standard. However, this is intended to be as least as stringent as the requirements included within the IESBA Code with respect to auditor independence.
If you have answered (a), (b) or (c), was the local Code translated? If yes, please indicate the language in which the local Code was translated.
Guidance and Educational Materials
For JSS, PAOs, Regulators or Oversight Bodies, and Accounting Firms only
13What guidance or educational materials has your organization issued, or what programs has your organization developed, to support understanding of how to use the local Code or provisions? (Select all that apply and provide links) - Technical guidance (e.g., FAQs) - Education/training programs (e.g., webinars, CPD programs) - Articles, publications or newsletters (e.g., updates about standards, case studies or illustrative examples) - Other (Please specify) - None
For individual PAPPs and PAIBs only
14What guidance or educational materials have you received or accessed with respect to how to use the local Code or provisions? (Select all that apply) - Technical guidance (e.g., FAQs) - Education/training programs (e.g., webinars, CPD programs) - Articles, publications or newsletters (e.g., updates about standards, case studies or illustrative examples) - Other (Please specify) - None
Other Support
For JSS, PAOs, Regulators or Oversight Bodies, and Accounting Firms only
15Does your organization offer guidance to individual professional accountants, accounting firms, or other users on the application of the local Code or provisions if they seek such assistance? (Select all that apply) - Ethics hotline or equivalent (e.g., for technical queries, application questions on how to use the local Code or provisions) - Discussion forum (e.g., for sharing knowledge) - Other (Please specify) - None
For individual PAPPs and PAIBs
16Do you have access to guidance on the application of the local Code or provisions in your jurisdiction if you seek such assistance? (Select all that apply) - Ethics hotline or equivalent (e.g., for technical queries, application questions on how to use the local Code or provisions) - Discussion forum (e.g., for sharing knowledge) - Other (Please specify) - None
Inquiries and Questions
For JSS, PAOs, Regulators or Oversight Bodies or Accounting Firms
17Which inquiries or questions relating to the structure and drafting of the local Code or provisions has your organization commonly received? (Please provide details, including from which stakeholder groups the inquiries or questions arose)
As the FRC does not adopt the Code, it does not receive such queries.
For individual PAPPs and PAIBs
18Which specific structure or drafting matters pertaining to the local Code or provisions have you inquired or raised questions about? (Please provide details)
Part C - Usability and Clarity of Language and Responsibility (All Respondents)
The overview below provides brief background to the questions that follow regarding specific aspects of the restructuring or redrafting of the IESBA Code.
Building Blocks Approach
The Restructured Code has four Parts which are focused on all professional accountants (Part 1), professional accountants in business (Part 2), professional accountants in public practice (Part 3), independence for audit and review engagements (Part 4A), and independence for other assurance engagements (Part 4B).
A building blocks approach was applied whereby Part 1 applies to all professional accountants but is not repeated in subsequent Parts. Rather, the provisions in subsequent Parts are incremental in nature and build off Part 1.
Each Part includes various Sections to address specific topics. Each Section of the Restructured Code is structured, where appropriate, as follows:
- Introduction — sets out the subject matter addressed within the section and introduces the requirements and application material in the context of the conceptual framework.
- Requirements — establish general and specific obligations with respect to the subject matter addressed.
- Application material – provides context, explanations, suggestions for actions or matters to consider, illustrations and other guidance to assist in complying with the requirements.
To guide users in navigating the provisions in the Code, a “Guide to the Code" was added.
19Is the building-blocks approach of the IESBA Code simple and clear, and does it help in navigating the Code? - Yes - Somewhat (Please explain your response)
The FRC does not adopt the IESBA Code and uses it mainly to benchmark its own Ethical Standard against the International Independence Standards. In doing so, we have found the Code to be straightforward to understand and navigate.
- No (Please explain your response)
20Is the "Guide to the IESBA Code” helpful in explaining how the Code is structured and should be applied? - Yes - Somewhat (Please explain your response) - No (Please explain your response)
We have not used the Guide to the IESBA Code, so we cannot comment on this specific matter.
Emphasizing Compliance with the Fundamental Principles and Applying the Conceptual Framework
To emphasize a professional accountant's responsibility to comply with the fundamental principles and apply conceptual framework:
- An overarching requirement was included in Sections 200, 300, 400 and 900; and
- Reference to the requirement to apply conceptual framework is included in the introductory sections of the remaining Sections within Parts 2, 3 and 4 of the Restructured Code.
21Is it clear within each Section that a professional accountant (or firm as appropriate) has the responsibility to comply with the fundamental principles and apply the conceptual framework? - Yes - Somewhat (Please explain your response) - No (Please explain your response)
As the FRC does not adopt the IESBA Code, we are not able to comment on this question.
Distinction Between Requirements and Application Material
To give more prominence to obligations set out in the Code (including specific prohibitions) and separate them from guidance or explanatory material, requirements are clearly distinguished from application material:
Requirements are designated with the letter "R" and, in most cases, include the word "shall”. The word "shall" in the Code imposes an obligation on a professional accountant or firm to comply with the specific provision in which “shall” has been used. In some situations, the Code provides a specific exception to a requirement. In such situation, the provision is also designated with the letter “R“ and is linked to the requirement to which they pertain by using the phrase "as an exception to."
Application material is designated with the letter "A.” Such provisions will follow the requirement that they are explaining.
Requirements will not reference application material to avoid blurring the distinction between requirements and application material.
Scalability
The Restructured Code was organized to illustrate the Code's scalability by giving greater prominence to the overarching requirement to comply with the fundamental principles and apply the conceptual framework, followed by specific requirements.
Requirements that apply to firms when providing professional services to public interest entities (PIEs) are located after requirements that apply to other entities.
22Does the IESBA Code's approach to delineating requirements (“R” paragraphs) from application material (“A” paragraphs) make it clear what a professional accountant's or firm's obligations are? - Yes - Somewhat (Please explain your response) - No (Please explain your response)
23Is it sufficiently clear that the Code is scalable and proportionate? - Yes - Somewhat (Please explain your response)
The IESBA Code provides a strong ethical foundation for the global accountancy profession. However, we would observe that the growth in the overall length of the Code, as well as the increase in granular requirements, may pose challenges for the overall scalability and proportionality of the Code. Indeed, the publication of 'The Proportionality of the IESBA Code' by the IESBA staff could be taken as an indication that the Code itself is insufficiently clear on these matters.
A focus on specific requirements might serve to obscure the fundamental principles developed by the Conceptual Framework and could make it harder to apply the underlying principles in all circumstances. Moreover, a longer Code may require increased resource to support its maintenance and thereby constrain the ability of the IESBA to respond to emerging issues in a timely manner.
We would therefore encourage the IESBA to consider ways in which the scalability and proportionality of the Code could be enhanced.
- No (Please explain your response)
24If your organization has responsibility to enforce compliance with the provisions of the Restructured Code, has the delineation of requirements and application material helped with enforceability? - Yes - Somewhat (Please explain your response) - No (Please explain your response) - N/A as do not enforce the provisions of the Restructured Code
Clarity of Language and Readability
The Restructured Code was redrafted to increase the clarity of language to improve its readability and understandability, including use of simpler and shorter sentences, simplifying complex grammatical structures, and avoiding legalistic and archaic terms.
Further, to minimize the risk of ambiguity and confusion through inconsistent use of terms, the IESBA agreed that:
- When the word "may” is used in the Code, it denotes permission to take a particular action in certain circumstances, including as an exception to a requirement. It is not used to denote possibility.
- When the word "might” is used in the Code, it denotes the possibility of a matter arising, an event occurring or a course of action being taken.
25Is the language used in the Code clear, readable and understandable? - Yes - Somewhat (Please explain your response and provide examples with reference to specific provisions in the Code which you consider may not be clearly drafted) - No (Please explain your response, and provide examples with reference to specific provisions in the Code which you consider are not clearly drafted)
The FRC does not adopt the IESBA Code and so is unable to provide a full answer to this question. It does use the Code to benchmark its own Ethical Standard. In doing so, we have found the language clear, readable, and understandable.
26Is the language used in the Code easy to translate? - Yes - Somewhat (Please explain your response and provide examples with reference to specific provisions in the Code which you consider may not be easy to translate) - No (Please explain your response, and provide examples with reference to specific provisions in the Code which you consider are not easy to translate)
The FRC is not in a position to comment on this question.
Other Comments
27Are there any other comments relating to the structure and drafting of the IESBA Code that the IESBA should consider as part of this PIR?
N/A
Part D - Clarity of Responsibility (For individual PAPPs, Accounting Firms, Regulators or Oversight Bodies, or PAOs)
The independence sections in the Restructured Code are included in the International Independence Standards (IIS) to emphasize its international application and enforceability.
The IIS comprise Part 4A – Independence for Audit and Review Engagements (i.e., Sections 400 to 899) and Part 4B - Independence for Assurance Engagements Other than Audit and Review Engagements (i.e., Sections 900 to 999).
In the IIS in Parts 4A and 4B, specific provisions relating to audits of entities that are not public interest entities (PIEs) and those relating to audits of PIEs are presented under separate headings titled:
- "All Audit Clients" to introduce provisions that apply in all circumstances and for all audits;
- "Audit Clients that are not Public Interest Entities" to introduce provisions that apply to audits of clients that are not PIEs; and
- "Audit Clients that are Public Interest Entities" to introduce provisions that apply to audits of PIEs only.
28Is an individual PAPP's responsibility in relation to independence clear? - Yes - Somewhat (Please explain your response) - No (Please explain your response)
29Is a firm's responsibility in relation to independence clear? - Yes - Somewhat (Please explain your response) - No (Please explain your response)
30Is a network firm's responsibility in relation to independence clear, and is that responsibility clearly distinguished from a firm's responsibility? - Yes - Somewhat (Please explain your response) - No (Please explain your response)
End of Survey
Thank you for your valuable input. Your input will inform the IESBA's Post-Implementation Review and help the IESBA develop global ethics and independence standards that are user-friendly, understandable, capable of consistent application, and readily enforceable.