Developed in close coordination with the International Auditing and Assurance Standards Board (IAASB), the paper responds to calls from stakeholders as well as IESBA and IAASB members to recognize and clarify the linkages between the two.
The analysis explains, at a high level, how the FCG viewpoints and ISQM 1 could interact, demonstrating their mutually supportive nature while recognizing the clear distinctions in their objectives, scope, output, and level of specificity as regards firm culture and governance:
ISQM 1 requires firms that perform engagements within the scope of IAASB’s engagement standards to establish a system of quality management to enable the consistent performance of quality engagements and issuance of appropriate reports. It requires that the firm demonstrates a commitment to quality through a culture that exists throughout the firm, which recognizes and reinforces, among others, the importance of professional ethics, values, and attitudes.
The IESBA FCG viewpoints focus on how firms can develop a strong ethical culture by embedding and prioritizing ethical values within the whole firm through eight elements of firm culture and governance.
While this paper seeks to explain the linkages between the FCG viewpoints and ISQM 1, it does not purport to be a like-for-like assessment. ISQM 1 is a standard already in effect. By contrast, the IESBA FCG viewpoints represent high-level, principles-based perspectives on key elements of firm culture and governance developed to support stakeholder engagement on advancing the development of a global FCG framework. The FCG viewpoints do not constitute a standard.
The IESBA will continue outreach and consultation with stakeholders in the coming months, with a view to informing a Board decision on the approach to the development, structure, and authority of such a FCG framework.
About IESBA
The International Ethics Standards Board for Accountants (IESBA) is an independent global standard-setting board. The IESBA’s mission is to serve the public interest by setting high-quality, international ethics (including independence) standards as a cornerstone to ethical behavior in business and organizations, and to public trust in financial and non-financial information that is fundamental to the proper functioning and sustainability of organizations, financial markets and economies worldwide.
Rui Peres Jorge
Director, Strategy and Communications
International Ethics Standards Board for Accountants (IESBA)
ruiperesjorge@ethicsboard.org | Direct: +351 966-301-383
Zsolt Bobis
Lead, Communications
International Ethics Standards Board for Accountants (IESBA)
zsoltbobis@ethicsboard.org
The International Federation of Accountants (IFAC) today announced revisions to its Statements of Membership Obligations (SMOs) 1–7, effective April 1, 2026. The SMOs set global benchmarks for IFAC members to support the adoption and implementation of international standards, as well as robust quality assurance and investigation and disciplinary systems.
The revisions introduce targeted refinements to reflect developments in quality management, professional education pathways, and expanded corporate and public sector reporting, and to support the continued modernization of the IFAC Member Compliance Program. The revisions follow a rigorous global due process, including an Exposure Draft and extensive public consultation in 2025, reinforcing the SMOs’ global credibility and authority.
Key revisions include:
Quality Management: Alignment with international quality management standards to strengthen firm-level systems.
Education: Encouragement of more flexible pathways into the profession, consistent with international education standards.
Reporting Standards: Integration of expanded public sector reporting standards issued by the International Public Sector Accounting Standards Board and expanded corporate reporting standards issued by the International Sustainability Standards Board.
“These revisions help IFAC members continue to lead with integrity and excellence, ensuring their organizations remain resilient, innovative, and trusted worldwide. By following the SMOs, our members strengthen the adoption of international standards, reinforce quality and public interest systems, and demonstrate the collective strength of a truly global accountancy profession,” said Lee White, IFAC Chief Executive Officer.
About IFAC IFAC, by connecting and uniting its members, makes the accountancy profession truly global.
IFAC member organizations are champions of integrity and professional quality and proudly carry their membership as a badge of international recognition.
IFAC and its members work together with the Forum of Firms and other key stakeholders to shape the future of the profession through learning, innovation, a collective voice, and commitment to the public interest.
The Statements of Membership Obligations (SMOs) set global benchmarks for IFAC members to support the adoption and implementation of international standards, as well as robust quality assurance and investigation and disciplinary systems. The 2026 revisions are effective April 1, 2026.
The World Bank Group’s Governance Global Department hosted stakeholders in Washington, D.C. for the presentation of IPSASB SRS 1, Climate-related Disclosures, the first-ever public sector sustainability reporting standard released by the International Public Sector Accounting Standards Board (IPSASB) earlier this year. The event, Advancing Climate Transparency: Global Launch of the First IPSASB Sustainability Reporting Standard, brought together leaders from government finance, international organizations, and the development community to advance standardized climate reporting in the public sector, a critical pathway to accessing climate finance, and managing public finances to enable meaningful climate action.
Global leaders at the World Bank IPSASB SRS 1 Launch Event in Washington, D.C., USA
Leaders agreed that the release of IPSASB SRS 1 was a significant milestone in advancing public sector sustainability reporting that extends beyond the private sector to the public sector and governments in order to capture their substantive share of global emissions and ability to set policy addressing climate risks for the entire economy.
Emphasizing that access to climate finance depends on clear, consistent disclosures of climate risks, priorities, and performance, leaders praised IPSASB SRS 1 for its clear contribution to strong financial management and reporting practices already in place by many governments. They also expressed a shared intention to work together to strengthen implementation and support adoption across jurisdictions.
IPSASB SRS 1 enables governments to better communicate climate-related risks and opportunities, allows for comparability between jurisdictions, builds confidence among development partners and investors to commit capital towards public sector efforts, and ultimately mobilizes climate finance at the scale to address global challenges.
IPSASB Chair Thomas Mueller-Marqués Berger said, “The ultimate success of IPSASB SRS 1 depends on how effective jurisdictions are at using it in practice. This World Bank event is a real turning point: global leaders are in agreement about the need to advance its use and want to work together to coordinate their efforts to turn ambition into action.”
Arturo Herrera, Global Director, Governance at the World Bank, said, “Stronger, more consistent reporting through IPSASB SRS 1 is important for supporting better decision-making, building trust, and enabling governments to access the financing needed to respond effectively to challenges in a sustainable way.”
IPSASB extends its sincere thanks to the World Bank for hosting the event and for their and other donors and development partners’ continued support in advancing high-quality public sector reporting globally.
The International Public Sector Accounting Standards Board (IPSASB®) works to improve public sector financial reporting worldwide through the development of IPSAS® Accounting Standards, IPSASB SRS™ Standards, and other high-quality financial reporting guidance for use by governments and other public sector entities. It also raises awareness of IPSAS Standards and IPSASB SRS Standards and promotes the adoption and implementation of these to enhance the quality and consistency of practice throughout the world and strengthen the transparency and accountability of public sector finances and sustainable development. The Board receives support from the Asian Development Bank, the Chartered Professional Accountants of Canada, the New Zealand External Reporting Board, the government of Canada, and The World Bank. The structures and processes that support the operations of the IPSASB are facilitated by the International Federation of Accountants (IFAC®). For copyright, trademark, and permissions information, please go to permissions or contact permissions@ifac.org.
About the Public Interest Committee
The governance and standard-setting activities of the IPSASB are overseen by the Public Interest Committee (PIC), to ensure that they follow due process and reflect the public interest. The PIC is comprised of individuals with expertise in public sector or financial reporting, and professional engagement in organizations that have an interest in promoting high-quality and internationally comparable financial information.
Stakeholders agree on the need for coordination to advance implementation
IESBA to analyze ethical and independence implications of private equity investment in accounting firms.
It will assess the need for standard setting on alternative practice structures.
In its March meeting, IESBA also agreed to develop new guidance on technology and AI, enhance its support for global implementation of the sustainability standards, and review the practical implementation of key ethics standards.
The International Ethics Standards Board for Accountants (IESBA) has agreed to launch a dedicated workstream to analyze issues relating to private equity investment in accounting firms from an ethical perspective. The objective is to assess the need for standard setting addressing alternative practice structures (APS), including those involving private equity investment.
The newly launched workstream will gather information and undertake analysis to support the IESBA’s assessment of whether a formal standard setting project is needed to address ethical considerations related to APS around the world. An update on the Private Equity Investment workstream is expected to be presented to the IESBA at its June 2026 meeting.
The Board also agreed on several other priority actions at its March 2026 meeting, including:
Developing new non-authoritative guidance on technology and artificial intelligence to support professional accountants as the profession continues to evolve through technological transformations.
Concentrating on global implementation of the IESBA’s sustainability standards ahead of their effective date this December.
Issuing stakeholder surveys in early April to inform the post‑implementation review of the NOCLAR provisions and the Restructured Code, reinforcing the IESBA’s commitment to a comprehensive approach to standard-setting.
The International Ethics Standards Board for Accountants (IESBA) is an independent global standard-setting board. The IESBA’s mission is to serve the public interest by setting high-quality, international ethics (including independence) standards as a cornerstone to ethical behavior in business and organizations, and to public trust in financial and non-financial information that is fundamental to the proper functioning and sustainability of organizations, financial markets and economies worldwide.
Rui Peres Jorge
Director, Strategy and Communications
International Ethics Standards Board for Accountants (IESBA)
ruiperesjorge@ethicsboard.org | Direct: +351 966-301-383
Zsolt Bobis
Lead, Communications
International Ethics Standards Board for Accountants (IESBA)
zsoltbobis@ethicsboard.org
