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The objectives of the change are to align more closely the definition of “those charged with governance” in the Code with that in the IAASB’s International Standard on Auditing (ISA) 260, 'Communication with Those Charged with Governance', and to eliminate any confusion as to how it is defined. The IESBA is of the opinion that the proposals do not call for any change in systems or common practice, should they be approved.
The change specifically aims to clarify that a subgroup, such as an audit committee, may assist the governing body in meeting its responsibilities. In those cases, the auditor shall determine with whom within the entity’s governance structure to communicate.
“Through this Exposure Draft, the IESBA seeks to ascertain whether the proposed change to the definition adequately clarifies the term ‘those charged with governance. .The IESBA believes this will contribute to more consistent application of the Code, which is critical to our mission to support the global adoption and implementation of the Code”, said Ken Dakdduk, chair of the IESBA.