Skip to main content

During the IFAC Professional Accountancy Organization (PAO) Development Committee meeting in New York, committee members, many of whom have worked for or closely with PAOs and accountancy regulators at national, regional, and international levels, discussed the importance of trust and professional ethics in the accountancy profession. They also considered how PAOs are best positioned to facilitate ethical requirement implementation. This article is based on the committee’s discussion and conclusions on the important role PAOs hold at the forefront of supporting best practices in ethics and trust.

Mounting global economic, social and environmental challenges test financial markets and institutions, and in turn, the accountancy profession. For professional accountants to be viewed as trusted advisors working in the public interest, it is essential that their actions are anchored by the fundamental principles of integrity, objectivity, professional competence and due care, confidentiality, and professional behavior as outlined in the International Code of Ethics for Professional Accountants.

These principles are the cornerstones that shape the accountancy profession’s value and impact. When professional accountants apply these principles in their work, the outcomes are honesty, integrity, and transparency. In turn, investors have more confidence in the information they receive, companies can operate more efficiently without fear of misconduct and misinformation, and important decisions that have significant financial impacts can be made using sound information.

PAOs are essential in championing trust and ethics—within the accountancy profession and in the broader financial services ecosystem. By focusing on communication and support alongside advocacy and awareness raising, PAOs can help professional accountants understand and adhere to their ethical obligations—which contribute to safeguarding the wider financial services market.

Communication & Support

There are many examples of effective ethics-related communication and support for PAOs to consider.

  • Education and training: PAOs are often the first stop for education and training of professional accountants and can require ongoing, mandatory training or a specific number of continuing professional development training on ethics to maintain membership. PAOs can also develop a one-stop resource center—like the South African Institute of Chartered Accountants, Association of Accounting Technicians, and Institute of Singapore Chartered Accountantstraining modules similar to ACCA’s and programs dedicated solely to ethics that are regularly updated to keep pace with current demands of the industry, as ICAEW has. PAOs can also take advantage of new platforms, such as podcasts (as CPA Canada has) and mobile applications (like Royal Nederlandse Beroepsorganisatie van Accountants) to reach professionals.
  • Utilizing practical case studies: A robust education program offered by PAOs should include real-life examples to better prepare practitioners for how to react in practice. PAOs could offer a compendium of case studies received anonymously from members that current and future practitioners can work through, allowing them to leverage knowledge and information around current issues and how those issues are being addressed.
  • Providing expert support for specific fields: Professionals in audit, business, and the public sector can encounter different dilemmas. PAOs might consider having at least one expert dedicated to responding to inquiries and questions from specific fields to better assist members in reaching a decision. Additionally, PAOs may need to review and expand training to meet the needs of particular fields. For examples, CFOs are now expected to understand a greater variety of risks and address them appropriately. One provider of the technical expertise on this topic should be PAOs.
  • Acting as a sounding board for practitioners: When faced with an ethical dilemma, many professionals will seek someone to discuss the issue and help sort out thoughts and options without necessarily providing an answer. This would especially benefit sole or small practices where there are a limited number of other individuals to speak to without potentially creating further conflicts of interest and create a sense of isolation. PAOs can serve as these sounding boards by offering confidential helpline (similar to Chartered Accountants Australia and New Zealand) services, an established group of senior members that stand ready to provide support to others as CMA Sri Lanka does, or an action-based framework like the one designed by the Royal Nederlandse Beroepsorganisatie van Accountants.
  • Providing space and time to understand what members in practice are facing: This may be general forums held throughout the year to hear directly from members or through surveys and research that help shed light on the pressures faced by their members in practice—both in the private and public sector. For example, CPA Ireland and Chartered Accountants Ireland partnered with the Chartered Accountants Ireland Education Trust to produce an ethics research report.

Once a PAO has developed relevant training and resources, it must continue to make its members aware of the available guidance and support through regular communication channels.

Advocacy & Awareness Raising

PAOs should educate their members and be strong advocates and educators of the business community, regulators, educators, and other stakeholders that employ professional accountants. PAOs might consider advocacy initiatives to support a more transparent business environment, including:

  • Raising awareness of ethical requirements amongst regulators: PAOs should be at the forefront of raising awareness and speaking out on issues related to trust and ethics. It is essential that other stakeholders understand the ethical obligations that professional accountants adhere to as part of serving the public interest. The pressure to act unethically may stem from those who do not understand the obligations professional accountants pledge to uphold. PAOs could run campaigns, pledges, and other outreach—as ICAS, the Philippines Institute of CPAs, and the Institute of Management Accountants have—to communicate the importance of the principles in the International Code of Ethics and consequences of misconduct.

  • Advocating for legislation to protect professional accountants: When professional accountants face a reporting misconduct—as emphasized by the NOCLAR (non-compliance with laws and regulations) standard in the International Code of Ethics—there should, ideally, be whistleblowing mechanisms in place within the PAO and national protective disclosure legislation to support them. These support systems should help ensure that professional accountants who rightfully report any misconduct do not face adverse impacts on their livelihood or safety.

    PAOs can use the collective voice and influence of their members to advocate to governments for the passage of such legislation if it does yet exist and similarly review its internal procedures for whistleblowing. The Institute of Certified Public Accountants of Kenya has exemplified this. Furthermore, as more anti-corruption agencies are established and dedicated to the sole task of rooting out corruption, PAOs may consider how—like the Palestinian Association of Certified Public Accountants and the Institute of Chartered Accountants of Namibia both did—to best cooperate with the agency to support members that may wish to disclose any misconduct.

  • Supporting members who lose employment after reporting misconduct: Reporting misconduct takes moral courage. If a member reports misconduct that is found to be factful and still faces adverse impacts, such as a loss of employment or tarnished reputation, PAOs should be prepared to support its members as a clear demonstration of its commitment to ethical behavior. This might be through a monetary fund or in navigating the search for a new position.

Looking Forward

In building a future-ready profession, a key component is ensuring that all professional accountants live by an ethical code. PAOs have and will continue to be an important voice in the conversation on trust and ethics. Just as PAOs engage with and educate a variety of stakeholders on ethical standards, PAOs might also consider how they can learn from other professional fields—such as the healthcare industry—on how to enhance the support they provide their members with ethical dilemmas. This is what it will take to be future ready.

IFAC PAO Development & Advisory Group

PAO Development & Advisory Group helps IFAC achieve strong, sustainable PAOs around the world. The advisory group, comprised of experts with decades of experience working with and for PAOs and developing their capacity, serve as important strategic advisors and actively contribute to IFAC’s strategic goals and implementation. Learn more