Countries around the world are searching for ways to shift capital investments into activities that support the transition to a more sustainable, low-carbon economy. To finance that massive change, investors and regulators are looking to the sustainable debt market as an important vehicle in raising funds to finance projects that advance environmental, social and governance (ESG) objectives.

“Trust and confidence in this relatively new, still evolving, and rapidly expanding market is critical,” said Kevin Dancey, CEO of the International Federation of Accountants (IFAC). “Like any financial innovation, there are challenges. Smart regulation, standardization and external verification or assurance are needed to protect investor interests, mitigate the risk of greenwashing and enhance transparency. Verifying the details of these bond programs—both pre-issuance and in the form of annual updates for investors—is an essential part of maintaining integrity. The accountancy profession can help drive progress.”

A new, comprehensive study that delves into the challenges and opportunities that exist in the sustainable debt market – Navigating the sustainable debt market: Enhancing credibility in an evolving market – is the result of a collaborative effort by IFAC and Chartered Professional Accountants of Canada (CPA Canada), who recruited PwC Canada to conduct the underlying research.

While the sustainable debt market has evolved significantly over the last few years, the study identified a number of issues that need to be addressed for the benefit of all capital market participants. These challenges include: the proliferation of voluntary, market-driven guidance; lack of a common understanding of what projects and activities qualify as “green” or “sustainable”; and inconsistent reporting, impact measurement, external review and assurance practices.

“Sustainability is increasingly being integrated into business, investment and financing decisions,” said Pamela Steer, president and CEO, CPA Canada. “Serving the public interest is core to the global accounting profession. It has a critical role to play in advancing sustainable finance. Collectively, the profession will continue to advocate for better policy, regulation and standards in this area and the study will help inform the dialogue.”

As part of the overall push to make sustainability front and centre for business, IFAC and CPA Canada welcome the establishment of the International Sustainability Standards Board (ISSB) by the IFRS Foundation. Globally accepted sustainability standards will enhance the credibility of ESG disclosures by improving their consistency and comparability and this will help mitigate some of the challenges identified in the report.

About CPA Canada
Chartered Professional Accountants of Canada (CPA Canada) works collaboratively with the provincial, territorial and Bermudian CPA bodies, as it represents the Canadian accounting profession, both nationally and internationally. This collaboration allows the Canadian profession to champion best practices that benefit business and society, as well as prepare its members for an ever-evolving operating environment featuring unprecedented change. Representing more than 220,000 members, CPA Canada is one of the largest national accounting bodies worldwide. cpacanada.ca

About IFAC
IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of more than 180 members and associates in over 130 jurisdictions, representing more than 3 million accountants in public practice, education, government service, industry, and commerce.

The global accountancy profession is on a journey—along with investors, companies, regulators and other stakeholders—toward a unified, coherent, global and authoritative standard-setting process for reporting on sustainability information.

IFAC welcomes the establishment of the International Sustainability Standards Board (ISSB), as well as jurisdiction or regional initiatives that can contribute toward the creation of a global system for consistent, reliable and assurable sustainability disclosure. 

In a joint statement today, IFAC joins with leading capital markets participants—PRI (Principles for responsible Investment) and WBCSD (World Business Council for Sustainable Development)—in calling for simplicity and alignment in the standard-setting process.  At this critical juncture, regulatory and standard-setting fragmentation must be avoided through efforts to align key concepts, terminologies, and metrics upon which disclosure requirements are built.

Read the statement on IFAC's website or download the PDF here.

The International Ethics Standards Board for Accountants (IESBA) is reminding stakeholders and encouraging the public to act soon and submit comments on their two open exposure drafts.

The Proposed Revisions to the Code Relating to the Definition of Engagement Team and Group Audits establish provisions that comprehensively address independence considerations for firms and individuals involved in an engagement to perform an audit of group financial statements. The exposure draft landing page linked above includes a webinar explaining the proposed revisions.

Comments are requested by May 31, 2022.

The Proposed Technology-related Revisions to the Code seeks to enhance the Code’s robustness and expand its relevance in an environment being reshaped by rapid technological advancements. The proposed amendments will guide the ethical mindset and behavior of professional accountants in business and in public practice as they deal with changes brought by technology in their work processes and the content of the services they provide. The exposure draft landing page linked above includes a webinar explaining the proposed revisions. 

Comments are requested by June 20, 2022. (For stakeholders who are unable to submit a formal response, an online survey has been created for the Tech ED.)

Public input is a critical component of the standards setting process. The IESBA encourages all stakeholders to comment on both important exposure drafts. Learn more about the IESBA at www.ethicsboard.org

Today, the Staff of the International Ethics Standards Board for Accountants (IESBA) released the report, Benchmarking International Independence Standards Phase 1 Report: Comparison of IESBA and US SEC/PCAOB Frameworks. The publication details the findings of a study comparing the provisions of the International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code)—in particular the independence provisions applicable to audits of financial statements of public interest entities (PIEs)—with the relevant rules of the U.S. Securities and Exchange Commission (SEC) and the US Public Company Accounting Oversight Board (PCAOB).

“Considerable advances have been made in recent years to strengthen the International Independence Standards, further reinforcing the important role of the independent audit to the integrity of financial markets worldwide,” said IESBA Chair Gabriela Figueiredo Dias. “This timely benchmarking analysis answers many questions we have received and provides much insight into how the provisions in the Code compare with those of a major jurisdiction like the U.S., and will ultimately instill greater public confidence in the robustness of the Code.”

The IESBA launched the benchmarking study to promote awareness and further adoption of the Code. Without making judgments as to the relative merits of the two independence frameworks, the report highlights the similarities and key differences between the Code and the U.S. SEC and PCAOB rules in areas of greatest interest to stakeholders, including the permissibility of non-assurance services to audit clients, fees, long association with an audit client, and business and financial relationships. The IESBA will consider the findings of the benchmarking analysis in developing its 2024-2027 Strategy and Work Plan.

Alongside the detailed report, the IESBA Staff has published an abridged report that provides an overview of the main similarities and differences, as well as an additional publication with further information on the background and objectives of the initiative.  

Learn more on the IESBA website.

The International Ethics Standards Board for Accountants (IESBA) today released the Report, Elevating Ethics and Independence Standards for a Complex World, summarizing the Board’s accomplishments for 2020 and 2021.

“This Report includes my final message as IESBA Chairman and showcases the significant progress that the IESBA has made on behalf of the public interest during a time of great uncertainty,” said Dr. Stavros Thomadakis, former Chairman of the IESBA. “This includes the critical work that has been completed to strengthen the International Independence Standards, especially in relation to Non-Assurance Services, Fees, and the definition of a public interest entity; as well as timely and important milestones in projects related to Tax planning, Technology, and Independence in Group Audits. I am also proud of the extensive work that has been done jointly with certain National Standards Setters to highlight the applicability of the International Code of Ethics for Professional Accountants (including International Independence Standards) to the unique challenges posed by the COVID-19 Pandemic.”

The 2020-2021 Report provides an overview of the IESBA’s extensive stakeholder outreach efforts. It also provides information about the Board’s partnership with IFAC to promote awareness, adoption, and effective implementation of the Code.

“As evidenced by this report, the IESBA’s body of work during the years the world was engulfed in a global pandemic is as important as it is impressive,” said IESBA Chair Gabriela Figueiredo Dias. “The IESBA successfully pushed key strategic initiatives further – such as the work to strengthen the International Independence Standards – while skillfully pivoting to address the real-time issues affecting professional accountants brought on by innovations in technology and the COVID-19 pandemic.”

The Report also provides an overview of the IESBA’s Consultative Advisory Group (CAG) and includes a message from the IESBA CAG Chairman, Mr. Gaylen Hansen.

Click here to learn more about IESBA.

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 ethics standards, including auditor independence requirements, which seek to raise the bar for ethical conduct and practice for all professional accountants through a robust, globally operable International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code).

This IESBA Sustainability and Ethics Discussion examines the critical role that complying with ethics standards, including on independence, plays in ensuring reliable and trustworthy sustainability information. The one-hour, live-streamed conversation between IESBA Chair, Gabriela Figueiredo Dias; IESBA Sustainability Working Group Chair and UK Financial Reporting Council Executive Director, Mark Babington, and Financial Conduct Authority Director of ESG, Sacha Sadan provided key insights about the applicability of the International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code) to the preparation and presentation of sustainability information and the provision of assurance thereon.

As the global voice of the accountancy profession, IFAC has supported a global system for delivering consistent, comparable and assurable sustainability information. Such disclosure must become a core component of the corporate reporting ecosystem that helps stakeholders assess objectives and progress towards addressing the climate crisis and other important environmental, social, and governance matters. European Sustainability Reporting Standards can play an important part in aligning global and jurisdictional-specific goals.

IFAC supports the view that sustainability disclosure requirements should be developed to capture and measure what really matters and to facilitate adoption and implementation in an internationally compatible manner. Alignment between global and jurisdiction-specific requirements, to the extent possible, is key for companies who operate across national borders, who compete for capital globally, and who are working towards a more sustainable future.  

IFAC CEO Kevin Dancey said “Collectively, we have an historic opportunity to embrace equivalency and interoperability in sustainability initiatives around the world, to leverage the work of existing high-quality sustainability frameworks, and to avoid costly regulatory fragmentation and complexity. Toward this end, IFAC strongly supports the ISSB’s recently announced working group that will establish dialogue for enhanced compatibility between the ISSB’s recent exposure drafts and ongoing jurisdictional initiatives like that of the European Union.”

The European Commission’s ambitious Corporate Sustainability Reporting Directive seeks to put sustainability-related reporting on the same footing as traditional financial reporting—addressing what sustainability information must be reported and requiring its assurance, among other important elements that can enhance corporate reporting.  We hope this important work ultimately contributes to—and amplifies the impact of—an emerging global sustainability disclosure system. 

Learn more about IFAC’s support for a global approach to sustainability-related disclosure on the IFAC website.

About IFAC
IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 180 members and associates in 135 countries and jurisdictions, representing more than 3 million accountants in public practice, education, government service, industry, and commerce.

The International Ethics Standards Board for Accountants (IESBA) invites stakeholders to its global webinar on its recently released pronouncement, Revisions to the Definitions of Listed Entity and Public Interest Entity in the Code.

• The webinar is scheduled for May 25, 10am EDT. Click here to register.

The one-hour live-streamed event will be presented by Mike Ashley, IESBA Public Interest Entity (PIE) Task Force Chair, and Andrew Mintzer, IESBA PIE Rollout Working Group Chair.

The revised provisions extend the scope of application of additional independence requirements for audits of financial statements of PIEs through enlarging the universe of entities that are PIEs. The revised provisions recognize the essential role relevant local bodies play in identifying the specific entities that should be scoped in as PIEs in their jurisdictions, encouraging them to properly refine the PIE categories in the expanded IESBA definition and adding any other PIE categories relevant to their environments. The revised provisions provide guidance to the local bodies in this regard. There is also a new transparency requirement for firms to publicly disclose the application of independence requirements for PIEs where they have done so.

The webinar will be held in English and available on YouTube.

For more on how the IESBA is strengthening international independence standards, visit www.ethicsboard.org/strengtheingIIS

Recently, the IESBA hosted two global webinars on the Board's exposure draft, Proposed Revisions to the Code Relating to the Definition of Engagement Team and Group Audits. Both webinars provided an overview of the exposure draft and opportunities for stakeholders to participate in a questions and answers session with the presenters. 

• Click here for the April 11 Webinar: presented by Ms. Caroline Lee, IESBA Deputy Chair and Chair of the IESBA’s Engagement Team – Group Audits Independence (ET-GA) Task Force, and Ms. Denise Canavan, former IESBA Technical Advisor and member of the ET-GA Task Force
• Click here for the April 19 Webinar: presented by Ms. Caroline Lee and Mr. Andrew Pinkney, IESBA Technical Advisor and member of the ET-GA Task Force

The proposals in the Exposure Draft establish provisions that comprehensively address independence considerations for firms and individuals involved in an engagement to perform an audit of group financial statements. The proposals also address the independence implications of the change in the definition of an engagement team―a concept central to an audit of financial statements―in the International Auditing and Assurance Standards Board's (IAASB) International Standard on Auditing (ISA) 220, Quality Management for an Audit of Financial Statements. The proposals were developed in close coordination with the IAASB's group audits and quality management projects.

Comments to the exposure draft are requested by May 31, 2022.

The current environment of rapid technological change continues to impact the way organizations operate, presenting both opportunities and challenges. The accountancy profession is not immune to this disruption and is also in the process of being transformed. This is according to a new thought leadership publication developed by the Chartered Professional Accountants of Canada (CPA Canada), the Institute of Chartered Accountants of Scotland (ICAS), the International Ethics Standards Board for Accountants (IESBA), and the International Federation of Accountants (IFAC). The publication highlights the need for the profession to redefine its value proposition, build new skills for the future and complete a competence paradigm shift in order to remain relevant.

Mindset and Enabling Skills of Professional Accountants – A Competence Paradigm Shift recognizes that the accountancy profession has a strong foundation to build on, but an enhanced technological literacy is essential in the information age. A shift in professional accountants’ education and training is needed to reflect emerging opportunities, with upskilling and “evergreen” learning becoming more important than ever. The profession needs to adopt a mindset that continually challenges and leads to an evolution of skills more rapidly than in the past, to harness the opportunities of the changing world and meet the needs of society.

Mindset and Enabling Skills of Professional Accountants – A Competence Paradigm Shift completes a four-part thought leadership series stemming from a collaborative exploratory paper and global roundtable event called Ethical Leadership in an Era of Complexity and Digital Change, which CPA Canada, ICAS and IFAC jointly hosted early in 2021.  It follows three earlier publications - Complexity and the Professional Accountant: Practical Guidance for Ethical Decision-Making, Technology is a Double-Edged Sword: Opportunities and Challenges for the Accountancy Profession, and Identifying and Mitigating Bias and Mis- and Disinformation.

The publication is available on the IFAC Knowledge Gateway and the IESBA’s webpage Technology: Ethics & Independence Considerations.

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About CPA Canada
Chartered Professional Accountants of Canada (CPA Canada) works collaboratively with the provincial, territorial and Bermudian CPA bodies, as it represents the Canadian accounting profession, both nationally and internationally. This collaboration allows the Canadian profession to champion best practices that benefit business and society, as well as prepare its members for an ever-evolving operating environment featuring unprecedented change. Representing more than 220,000 members, CPA Canada is one of the largest national accounting bodies worldwide. cpacanada.ca

About ICAS
The Institute of Chartered Accountants of Scotland (ICAS) is the global professional body for Chartered Accountants. We educate, examine and lead, enabling excellence whilst always working for the wider public good. All 23,000 ICAS members have earned our world-class CA designation of Chartered Accountant, the qualification that’s shaped an international business community spanning industries and continents, full of local heroes and corporate leaders. And we continually foster the bonds between our members, so CAs at all stages of their careers can learn from shared experience and connect their ambitions to success. For further information please visit – icas.com.

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 ethics standards, including auditor independence requirements, which seek to raise the bar for ethical conduct and practice for all professional accountants through a robust, globally operable International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code).

About IFAC

The International Federation of Accountants (IFAC) is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. Comprised of 180 members and associates in more than 130 countries and jurisdictions, IFAC represents more than 3 million accountants in public practice, education, government service, industry and commerce.

Over four decades, IFAC has represented the global profession and supported the development, adoption, and implementation of international standards that underpin the contributions of today’s global accountancy profession. IFAC has maintained a long-term approach to building and strengthening a global accountancy profession that supports transparent, accountable, and sustainable organizations, financial markets, and economies.