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05 May 2021

Accountancy Europe: IESBA’s proposed revisions to the definitions of listed entity and public interest entity in the code


Accountancy Europe is pleased to provide its comments on the IESBA Proposed Revisions to the Definitions of Listed Entity and Public Interest Entity in the Code.


We agree with the objectives of the PIE project to review the definitions of the terms “listed entity” and “PIE” in the Code so that they remain fit for purpose, and an agreement between the IESBA and the IAASB is established on a common revised definition of the term “listed entity”. While doing these the main goal should be to provide clarity and to avoid further fragmentation in the application of both Boards’ standards.
Auditors are working in the public interest which is best served by high quality audits. Performing an audit in an independent manner contributes to this. However, it will be misleading to take an approach which assumes stricter independence rules mean higher audit quality.


We do not agree with the broad approach proposed by the IESBA. The Code should define a minimum list of PIE categories as a baseline and other entities can be designated as PIE depending on the local circumstances. The role of local standard-setting bodies will only be more relevant when this refinement is not done by laws and regulations. This is not the case in the European Union (EU).


There is no benefit in establishing a requirement for firms to determine if any additional entities should be treated as PIEs. This will only lead to confusion and practical difficulties as explained further in our detailed responses.


Finally, expanding the PIE definition in the Code should not systematically lead to creating additional requirements in the IAASB standards.


We also invite the IESBA to make an impact assessment related to a potential expansion of PIE definition on the recent significant revisions of the Code (i.e., NAS and Fee related proposals). These bring additional requirements for PIE auditors and stakeholders provided their comments to these proposals considering the PIE definition in the extant Code.

Accountancy Europe



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