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IESBA_Auditor Independence for Audits of Collective Investment Vehicles and Pension Funds
- 07 April 2025
- Auditing and Assurance
- South African Accounting Academy
Summary:
The International Ethics Standards Board for Accountants (IESBA) has launched a public consultation to gather feedback on auditor independence for audits of Collective Investment Vehicles (CIVs) and Pension Funds (“Investment Schemes”).
Article:
The consultation paper seeks views on whether revisions to the International Code of Ethics for Professional Accountants, including International Independence Standards, are necessary to address the independence of auditors when they audit these Investment Schemes. The IESBA aims to ensure that its standards are clear and fit for purpose in maintaining appropriate auditor independence in such audits.
These Investment Schemes enable investors to pool their funds and often rely on external parties (“Connected Parties”) for functions that are typically managed internally in conventional corporate structures. This structure introduces specific relationships that need careful consideration to identify and address threats to auditor independence. The consultation paper highlights these relationships and seeks input on key areas when auditing Investment Schemes to ensure that any threats to auditor independence are identified and appropriately addressed.
Key areas of focus include:
- The definition of "related entity" in the Code and its applicability to audits of Investment Schemes.
- The Connected Parties that should be considered in relation to the assessment of auditor independence with respect to the audit of an Investment Scheme.
- The application of the Code’s conceptual framework when assessing threats to independence resulting from interests, relationships, or circumstances between the auditor of an Investment Scheme and Connected Parties.
The IESBA invites comments from all interested parties and stakeholders, including financial industry representatives, audit firms, experts, investors, regulators, and jurisdictional standard setters.
Deadline for submission of feedback/comments electronically through the IESBA website is by 30 June 2025.
Click here to download the 29-page document:
Relevance to Auditors, Independent Reviewers & Accountants:
- As an accountant, auditor and independent reviewer, you need to comply with International Code of Professional Conduct.
- Failure to adhere to the Code may lead to disciplinary action.
- Auditors, Independent Reviewers and Accountants should be aware of the latest standards of the International code of ethics for professional accountants, as well as approved exposure drafts that have been issued.
- Auditors should focus on key areas when auditing Investment Schemes to ensure that any threats to auditor independence are identified and appropriately addressed.