NZAuASB Update 2/2021

Implications of the Public Interest Entity (PIE) definition

This NZAuASB Update provides you with an overview of the New Zealand Auditing and Assurance Standards Board’s recent activities, any new standards or FAQs, as well as other matters of interest.

Proposed Revisions to the Definition of Public Interest Entity in the Code

IESBA ED cover

Applies to:

Professional & Ethical

The International Independence Standards contain additional independence requirements for audit clients that are a Public Interest Entity (PIE).

The IESBA is proposing a more holistic approach to defining a PIE with the global standards and has released for public comment the Exposure Draft, Proposed Revisions to the Definitions of Listed Entity and Public Interest Entity in the Code.  The IESBA seeks comment by 3 May 2021.

The proposals:

  • Introduce an objective for additional requirements to enhance confidence in the audit of financial statements of PIEs;
  • Provide guidance on factors to consider when determining the level of public interest in an entity;
  • Broaden the definition of PIE to additional categories of entities
  • Replace the term “listed entity” with the term “publicly traded entity”
  • Introduce requirements for firms to determine if additional entities should be treated as PIEs and to publicly disclose if an audit client was treated as a PIE.

Have a look

The current New Zealand definition of a PIE already incorporates the proposed additional categories of entities to be included in the global definition of a PIE. The NZAuASB is therefore not proposing to adopt the wording of the exposure draft without amendment in New Zealand.  The NZAuASB intends to prepare a domestic exposure draft once the global standard is finalised.  The NZAuASB is however interested to hear your thoughts on the IESBA proposals to inform the development of a New Zealand submission. 

Webinar iconWe invite you to attend an interactive webinar on 8 March 2021 at 12 noon to explore the IESBA proposals and the impact of these proposals in the New Zealand context. This is also your opportunity to provide us with your feedback on the current New Zealand PIE definition.

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This NZAuASB Update is intended to provide subscribers with a summary of the recent activities of the New Zealand Auditing and Assurance Standards Board (NZAuASB). Links to websites are correct at the time of publication. Subscribers should not rely on this newsletter as a definitive publication of updates. The External Reporting Board and its sub-Board the NZAuASB do not guarantee, and accept no legal liability whatsoever arising from or connected to, the accuracy, reliability, currency, timeliness or completeness of this newsletter. The information contained in this newsletter does not constitute advice and should not be relied upon as such.