International Ethics Standards Board for AccountantsThe Internati onal Ethics Standards Board for Accountants (IESBA) develops ethical standards and guidance for use by professional accountants.

ObjectiveThe Internati onal Ethics Standards Board for Accountants develops and issues in the public interest high-quality ethical standards and other pronouncements for professional accountants for use around the world. The IESBA Code of Ethics for Professional Accountants and Interpretati ons apply to all professional accountants, whether in public practi ce, in business, educati on, and the public sector. The IESBA Code serves as the foundati on for codes of ethics developed and enforced by member bodies. No member body of IFAC or fi rm issuing reports in accordance with Internati onal Auditi ng and Assurance Standards is allowed to apply less stringent standards than those stated in the IESBA Code.

Due ProcessA rigorous due process followed by the Internati onal Ethics Standards Board for Accountants is criti cal to ensure that the views of those aff ected by its standards and interpretati ons are thoroughly considered. The process outlined below is applicable to the development of all Internati onal Ethics Standards Board for Accountants pronouncements.

• Research and consultati on—A project task force is ordinarily established with the responsibility to develop a draft standard or interpretati on. The task force develops its positi ons based on appropriate research and consultati on.

• Transparent debate—A proposed standard or interpretati on is presented as an agenda paper for discussion and debate at an Internati onal Ethics Standards Board for Accountants meeti ng, which is open to the public.

• Exposure for public comment—Exposure draft s are placed on the Internati onal Ethics Standards Board for Accountants’ website and are widely distributed for public comment. The exposure period is ordinarily no shorter than 90 days.

• Considerati on of comments received on exposure—The comments and suggesti ons received as a result of exposure are considered at an Internati onal Ethics Standards Board for Accountants meeti ng, which is open to the public, and the exposure draft is revised as appropriate. If the changes made aft er exposure are viewed by the Internati onal Ethics Standards Board for Accountants to be so substanti ve as to require re-exposure, the document is reissued for further comment.

• Affi rmati ve approval—Approval of exposure draft s, re-exposure draft s, standards and interpretati ons is made by the affi rmati ve vote of at least two-thirds of the members.

Public Interest OversightThe Public Interest Oversight Board (PIOB) oversees the public interest acti viti es of IFAC. The objecti ve of the PIOB is to increase confi dence of investors and others that such acti viti es, including the setti ng of standards by the Internati onal Ethics Standards Board for Accountants, are properly responsive to the public interest. PIOB members are nominated by internati onal insti tuti ons and regulatory bodies.

International Federation of Accountants

An overviewof the IESBA’srole andstandard-setti ngprocess

Internati onal Ethics StandardsBoard for AccountantsPronouncements

• The IESBA Code of Ethics for Professional Accountants establishes principles of ethics for the 2.5 million professional accountants who are members of IFAC member bodies.

• Interpretati ons to the IESBA Code of Ethics for Professional Accountants assist in the applicati on of the IESBA Code. The interpretati ons are authoritati ve.

Leading the Development of the Worldwide Accounti ng Profession NOVEMBER 2010

Fundamental PrinciplesThe IESBA Code of Ethics requires accountants to adhere to fi ve fundamental principles:• Integrity—A professional accountant should be straightf orward and honest in performing

professional services.• Objecti vity—A professional accountant should not allow bias, confl ict of interest or undue

infl uence of others to override professional or business judgments.• Professional Competence and Due Care—A professional accountant has a conti nuing duty

to maintain professional knowledge and skill at the level required to ensure that a client or employer receives competent professional service based on current developments. A professional accountant should act diligently and in accordance with applicable technical and professional standards when providing professional services.

• Confi denti ality—A professional accountant should respect the confi denti ality of informati on acquired as a result of professional and business relati onships and should not disclose any such informati on to third parti es without proper and specifi c authority unless there is a legal or professional right or duty to disclose. Confi denti al informati on acquired as a result of professional and business relati onships should not be used for the personal advantage of the professional accountant or third parti es.

• Professional Behavior—A professional accountant should comply with relevant laws and regulati ons and should avoid any acti on that discredits the profession.

Role of the International Ethics Standards Board for Accountants CAGThe Internati onal Ethics Standards Board for Accountants Consultati ve Advisory Group (CAG) is comprised of representati ves of regulators and business and internati onal organizati ons who are interested in the development of high quality internati onal ethical standards. Through acti ve consultati on, the Internati onal Ethics Standards Board for Accountants receives valuable public interest input on its agenda, project ti metable, prioriti es, and technical issues.

International Ethics Standards Board for Accountants MembersThe Internati onal Ethics Standards Board for Accountants consists of a chairman and 17 volunteer members from around the world comprising representati ves from IFAC member bodies, practi ti oners in public practi ce and other individuals with an interest in the work of the IESBA. Members are appointed by the IFAC Board based on recommendati ons from the IFAC Nominati ng Committ ee and are approved by the PIOB. A complete list of Internati onal Ethics Standards Board for Accountants members along with their biographies is available on the Internati onal Ethics Standards Board for Accountants’ website: htt p://www.ifac.org/ethics.

About IFACThe structures and processes that support the operati ons of the IESBA are facilitated by IFAC. IFAC is the worldwide organizati on for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributi ng to the development of strong internati onal economies. IFAC is comprised of 164 members and associates in 125 countries and jurisdicti ons, representi ng more than 2.5 million accountants in public practi ce, educati on, government service, industry and commerce. The organizati on, through its independent standard-setti ng boards, sets internati onal standards of ethics, auditi ng and assurance, educati on and public sector accounti ng. It also issues guidance to encourage high quality performance by professional accountants in business.

Contact InformationFor more informati on about the Internati onal Ethics Standards Board for Accountants and its current projects, please visit its website at www.ifac.org/ethics or contact Ken Dakdduk, Chair, by email: kenneth.e.dakdduk@us.pwc.com; or Jan Munro, Deputy Director, by email: janmunro@ifac.org, or telephone: +1 (416) 512-0771.

11/10

IESBA membersundertake todevelopstandards andinterpretati onsin the publicinterest.

Internati onal Federati on of Accountants545 Fift h Avenue, 14th Floor, New York, NY 10017 USA Tel +1 (212) 286-9344 Fax +1 (212) 286-9570 www.ifac.org email: pr@ifac.org