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IAASB: New Publicly Traded Entity Definition Aligned with the IESBA Code of Ethics
- 08 September 2025
- Audit
- South African Accounting Academy
Summary:
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).
Article:
In essence, the IAASB has adopted the New Publicly Traded Entity Definition aligned with the IESBA Code of Ethics.
The new definition will amend the International Standards on Quality Management (ISQMs) and International Standards on Auditing (ISAs). In addition, amendments to International Standard on Review Engagement (ISRE) 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. Refer to our previous Alert dated 22 February 2024 for previously proposed amendments
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.
Access the Basis for conclusions (33 pages) at https://ifacweb.blob.core.windows.net/publicfiles/2025-08/IAASB-Narrow-Scope-Amendments-PIE-PTE-Basis-for-Conclusions.pdf
Click here to download the 67-page Final Pronouncement document:
Relevance to Auditors, Independent Reviewers & Accountants:
- As an auditor and independent reviewer, you need to comply with International Standards on Quality Management, International Standards on Auditing and other Assurance Services (including review engagements), and thus you need knowledge of newly revised and proposed standards that are approved as well as when they become effective.
- Failure to adhere to international standards may be interpreted as negligence and you could be held liable.
- Auditors, Independent Reviewers and Accountants should be aware of the latest pronouncements, publications and guidance issued by regulators and standard-setting boards, such as the IAASB.