IAASB Aligns Publicly Traded Entity Definition with IESBA Code

Posted 08 September 2025 Written by Acts Online
Category Financial and Accounting

Brought to you by SA Accounting Academy: The International Auditing and Assurance Standards Board (IAASB) has released narrow-scope amendments to its standards, revising the definition of a ‘listed entity’ to align with the ‘publicly traded entity’ definition in the International Ethics Standards Board for Accountants’ (IESBA) Code of Ethics for Professional Accountants.

In terms of these narrow-scope amendments, the IAASB has updated the International Standards on Quality Management (ISQMs) and the International Standards on Auditing (ISAs). These changes ensure that the scope of entities subject to specific requirements for listed entities in the IAASB standards is consistent with the Public Interest Entity (PIE) and Publicly Traded Entity (PTE) categories defined by the IESBA.

The amendments also extend to International Standard on Review Engagements (ISRE) 2400 (Revised), Engagements to Review Historical Financial Statements. These specific revisions address public disclosures regarding the application of independence requirements, ensuring transparency when a practitioner has applied independence standards for public interest entities during a review engagement.

Key Regulatory Documents

The IAASB has released two primary documents detailing these changes:

  • The 67-page Final Pronouncement, which contains the specific text of the amendments across the affected standards.
  • A 33-page Basis for Conclusions, which provides the rationale for the IAASB’s decisions and how they addressed stakeholder feedback during the consultation process.

Click here to download the Final Pronouncement (67 pages) and the Basis for Conclusions (33 pages).

What this means for you, your business, or your clients

  • For yourself: You must update your technical knowledge of the ISQMs and ISAs to ensure that audit and review engagements are correctly categorized under the new ‘publicly traded entity’ definition.
  • For your business: Audit firms must revise their internal quality management systems and independence monitoring protocols to align with the expanded definitions, ensuring that all entities now classified as publicly traded are subject to the appropriate level of scrutiny and disclosure.
  • For your clients: Clients that fall under the revised definition of a publicly traded entity may face new requirements regarding the public disclosure of their auditor’s independence and the application of more stringent independence standards.

Originally published at https://accountingacademy.co.za/news/read/iaasb-new-publicly-traded-entity-definition-aligned-with-the-iesba-code-of-ethics

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