CIVs, Pension Funds and Investment Company Complexes

Objective

The objectives of the project team are to:

  1. Review CIVs and pension fund arrangements and their relationships with trustees, managers and advisors to gain a comprehensive understanding of these arrangements to ensure that the independence provisions and the application of the “related entity” definition in the International Independence Standards in Part 4A of the Code remain fit for purpose;
  2. Review investment company complexes and consider whether the Code should be enhanced to address these structures, such as establishing new terms and definitions, and clarifying which entities or arrangements within such a complex should be considered as related entities of an audit client; and
  3. Develop a report and recommendations to the IESBA.
PROJECT TEAM
IESBA June 2024 Meeting Highlights

The IESBA considered an update from the Project Team on its activities in respect of CIVs, pension funds and ICCs since the March 2024 Board meeting, which included data collection using questionnaires and interviews with experts from various jurisdictions. The IESBA also considered an overview of the size and complexity of the global investment scheme industry and the Working Group’s preliminary findings on:

  • The application of certain independence provisions in the IESBA’s International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code) to CIVs and pension funds; and
  • A jurisdictional analysis of variations in the legal structures of funds, governance and fund operations and differences in legislation, regulations, and auditor independence requirements.

The IESBA discussed the scope and direction of the work stream, including expanding consideration of other independence provisions in the Code such as business relationships, financial interests, and employee relationships, and identifying any other potentially inconsistent application of the Code to investment schemes.

An update on this work stream will be presented at the IESBA’s September 2024 meeting.

Project Stages