OROC Congress Ethics and Accountability

Standing for trust and integrity

OROC Congress

Ethics and Accountability

Lisbon, 22 October 2010

Hilde Blomme

FEE Director of Practice Regulation

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About FEE

43 professional institutes of more than 500.000 accountants all contributing to a more efficient, transparent and sustainable European economy

32 European countries, including all 27 EU MS

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FEE: Representing the Profession and Adding Value to Members

Catalyst in Europe

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Areas of Activities

Company Law Corporate

Governance

Ethics

Auditing

Accounting

Insurance

Banks

Financial Reporting

Sustainability

Qualification and Market

Access

SMEs-SMPs

Public Sector Taxation And more…

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Overview: Europe and Ethics

IESBA Code of Ethics in European Countries

European Commission Green Paper on Audit Policy

FEE Discussion Paper on Integrity in Professional Ethics

FEE Comparison Project on Auditor Independence

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IESBA Code of Ethics

in European Countries

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IESBA Code of Ethics in European Countries

Countries Status # %

Bulgaria, Cyprus, Czech Republic, Denmark (FSR), Finland, Romania, Slovenia, Sweden (FAR)

IESBA Code of Ethics (2009) 8 28

Belgium, Iceland, Malta, Netherlands, Portugal, Slovakia, Spain, Switzerland

Considering adopting IESBA Code of Ethics (2009)

8 28

Ireland, UK IESBA Code of Ethics (2009) for cross-border purposes, some institutes also for national purposes

2 6

Estonia IESBA Code of Ethics (2009) as best practice

1 3

Austria, France, Germany, Greece, Hungary, Italy, Latvia, Lithuania, Luxembourg, Poland

National ethics code 10 35

TOTAL 29 100

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European Commission

Green Paper on Audit Policy

PROPOSALS RE INDEPENDENCE

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Green Paper

Proposals re:

Role of auditors

Governance and independence audit firms

Supervision

Concentration and market structure

Creation European Market

Simplification: SMEs & SMPs

International cooperation

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Proposals to Enhance Independence of Auditors

Appointment and remuneration of auditors by third party, not company (shareholders)

Mandatory audit tendering Mandatory audit firm and partner rotation Prohibition provision non-audit services (NAS) (for all

audits?) Pure audit firms Limit proportion fees from 1 audit client European “qualification” passport for auditors with

common independence rules (IESBA Code?) Permit provision of NAS to SMEs, like tax, HR, access

to credit, certain accounting

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FEE Discussion Paper

on Integrity

in Professional Ethics

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Integrity in Professional Ethics

FEE Discussion Paper issued in September 2009 for comments by 31

January 201030 response letters receivedAnalysis of responses being finalisedTo promote debate

Integrity is the core principle of professional behaviour, but the hardest to understand and instil in people

More focus on guidance and training on integrity rather than independence and objectivity

What does it mean?

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Integrity is more than Words...

Personal Professional

BE

HA

VIO

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Culture

Information

Policies

Strategy

LeadershipAwareness

Predictability

Transparency

Long-term view

People

Embedding Organisational Integrity

Be honest and truthful

Deal fairly

Comply with laws

Promote public interest

Show consistency

Be open-minded

Take corrective action

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FEE Comparison Project

on Auditor Independence

Relevance of the Code for FEE and FEE

Member Bodies

The Case for a Common Code

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Discussion and Questions

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