The first digital native generation entering the workforce is being shaped by the unique world catastrophes they’ve lived through in their young lives, finds a global report from ACCA (the Association of Chartered Certified Accountants) and IFAC (the International Federation of Accountants).

The views of 9,000 18 to 25-year-olds are published in Groundbreakers: Gen Z and the future of accountancy and reveal their primary concerns are around job security, well-being and mental health, offering a wakeup call to employers who need to show they care.

While survey respondents are broadly convinced that businesses have a positive impact on wider society (69%), they think there is significant room for improvement from business leaders. They see accountancy as an attractive career – providing long term prospects and portability with access to jobs that span internationally and across industries – but it’s also clear this generation questions business’ integrity.

They believe businesses continue to prioritize the maximization of returns to investors (66%) over taking care of customers (53%) and employees (47%). They are also less convinced that business leaders have integrity and do what they say (41%) and fewer of them believe businesses are currently pulling their weight in fighting climate change (39%).

ACCA and IFAC say the findings of this global research are very relevant for employers regardless of the sector, and that meeting this generation’s needs and addressing their concerns will be essential to thrive. For the accountancy profession specifically, its central purpose to create sustainable value for organizations while acting in the public interest places it in a unique position to harness this opportunity.

“This 18 – 25-year-old age group of Gen Z is smart, connected, ambitious yet realistic – but they have concerns about the future and how business operates,” said Helen Brand, chief executive of ACCA. “What we see from this research is young people at the outset of their accountancy careers keen to play their part in economic renewal. They’ll bring their talents and aspirations into the workplace and, through them, transform the future of accountancy for the modern world. Employers of all sizes need to be aware of this generation’s hopes and ambitions and the value they can bring.”

“Shaped by economic crises, the current climate emergency, and most recently the global pandemic, Generation Z is coming of age during a very difficult and challenging period in global history,” said Kevin Dancey, chief executive officer of IFAC. “Leaders of Professional Accountancy Organizations (PAOs), global network firms, and industry, not only have an opportunity to welcome this new generation of accountancy leaders into our organizations, but to actively learn from them. Although no one knows exactly what the future may hold, one thing is for certain: Generation Z accountancy professionals have a critical role to play in our future.”

Groundbreakers: Gen Z and the future of accountancy offers employers 10 ways to harness the potential of Gen Z:

1. Tap into Gen Z’s digital mastery: Astute enterprises are seeing Gen Z as fantastic ambassadors and early adopters to encourage the rest of the business to digitally transform.
2. Think “intrapreneurship”: Create a culture where young people can bring their entrepreneurial thinking and capabilities to fruition within the relative safety of an organization.
3. Use social to recruit and recognize the power of peers: Beyond social media, activities such as using Gen Z ‘brand ambassadors’ who are authentic and believable on university campuses to encourage peers to be interested in organizations can pay dividends.
4. Be authentic and listen to Gen Z: Gen Z values authenticity and sees it as a key factor in making initial decisions about joining an organization.
5. Focus on well-being: Gen Z is concerned about their well-being, so employers need to support this.
6. Align organization purpose with individual development needs: Organizations need to articulate what they stand for, their purpose and impact on wider society. Gen Z is keen to understand how the organization makes a difference and what their contribution could be to the vision of the enterprise.
7. Create collaboration opportunities across the workforce: To help Gen Z progress, make them part of the bigger picture.
8. Reward on outcomes not inputs: Employers need to focus on outcomes and the results achieved, rather than hours spent on a task.
9. Give continual feedback: Create a culture of continual feedback and acknowledgement -this is essential in engaging Gen Z as they’ve grown up in a world of instant communication and rating opportunities through digital.
10. Rethink learning: Make it short and visual to encourage Gen Z’s learning.

The full report can be downloaded here.

The International Ethics Standards Board for Accountants® (IESBA®) today released revisions to the Non-Assurance Services (NAS) and fee-related provisions of the International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code). The revised NAS and fee-related provisions significantly strengthen the guardrails around auditor independence in two important areas that have the potential to create incentives influencing auditor behavior—non-assurance services provided to audit clients and fees.

“Independence is fundamental to the role of auditors as corporate guardians and ultimately to public confidence in financial reporting and market integrity,” said IESBA Chairman Dr. Stavros Thomadakis. “With the significant strengthening of the NAS and fees provisions, we have taken bold steps to set an even higher bar for the standards of independence required of auditors globally, especially in relation to public interest entities. We believe these changes represent a major advance in the public interest.”

The package of new measures includes:

• A far-reaching prohibition on audit firms from providing a NAS that might create a self-review threat to an audit client that is a public interest entity.
• New provisions to enable and promote more robust engagement between auditors and those charged with governance of public interest entities about independence matters relating to NAS and fees.
• Strengthened provisions to address undue fee dependency on audit clients.
• Provisions to stimulate greater public transparency about fees paid by audit clients that are public interest entities to assist stakeholder judgments about auditor independence.
• Comprehensive guidance to steer auditors’ threat assessments and actions in relation to NAS and fees.

“The revised NAS and fee-related provisions reflect current public interest expectations with respect to auditor independence in two important areas," said Gaylen Hansen, IESBA Consultative Advisory Group (CAG) Chair. "The IESBA CAG, with its diverse membership base, has unanimously supported and encouraged the IESBA’s formidable leadership in effecting these changes.”

The revised NAS and fee-related provisions have been informed by extensive research, global roundtables and other outreach to investors, the corporate governance community, regulators, audit oversight bodies, national standard setters, accounting firms, preparers of financial statements, and others. In addition, the development of the provisions has benefited from close coordination with the International Auditing and Assurance Standards Board (IAASB).

The revised NAS and fee-related provisions become effective for audits of financial statements for periods beginning on or after December 15, 2022. Early adoption is permitted and encouraged.

In support of global adoption and implementation of the new standards, the IESBA has developed Bases for Conclusions and other resources which are available on the IESBA’s website. Additional support materials and resources will be published in 2021.

IFAC, the International Federation of Accountants, which comprises 180 member and associate organizations and represents more than 3 million professional accountants globally, welcomes the publication of the much-anticipated draft text of the European Union’s revised Corporate Sustainability Reporting Directive.

This ambitious proposal demonstrates leadership on the issue of corporate reporting. The legislation seeks to put sustainability-related reporting on the same footing as traditional financial reporting. This is long overdue. Specific proposals, such as where sustainability information is reported, mandatory assurance, a digital reporting taxonomy, and expanded scope for oversight by audit committees, are all important elements of enhancing the corporate reporting ecosystem to include sustainability-related information.  

As progress on the IFRS Foundation’s Sustainability Standards Board accelerates, IFAC believes policymakers have a unique opportunity to build a truly global system for sustainability reporting. We hope the EU’s important work ultimately contributes to—and amplifies the impact of—the emerging global system.

IFAC CEO Kevin Dancey said, “It is great to see a commitment to the needs of investors as well as other stakeholders, and to cooperation and alignment with international initiatives, including proposed work of the IFRS Foundation as well as the efforts of various public authorities. IFAC urges the IFRS Foundation to move with speed so that the benefits of baseline standards for enterprise value reporting will be available to all jurisdictions, while preserving the flexibility for disclosures that meet local needs addressing wider sustainability development goals. These are truly exciting times. We will continue to engage with the various stakeholders in this space as we all work toward the shared goal of a global system for reporting sustainability-related information in the public interest.”

Read Kevin Dancey’s recent letters to IFAC member organizations here and here.

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.

Earlier today, IESBA released an update on its technology initiative. 

Click here to learn more and access the publication. 

Earlier today, the IESBA’s Long Association Post-Implementation Review (LAPIR) Working Group released a questionnaire seeking stakeholder feedback on key matters relating to Phase 1 of the LAPIR.

The questionnaire forms part of the Working Group’s information gathering and will help inform the IESBA’s review of the implementation of the five-year cooling-off requirement for engagement partners on audits of public interest entities. This review is being undertaken before the “jurisdictional provision” in the standard expires for audits of financial statements for periods beginning on or after December 15, 2023. The jurisdictional provision permits jurisdictions to apply a cooling-off period less than five years subject to specified conditions.

Click here to download an update of the LAPIR released in March 2021.

How to Participate in the Questionnaire

Click here to access the questionnaire. Please provide your response by May 31, 2021.

If you have any queries about the questionnaire or Phase 1 of the LAPIR, please contact Geoff Kwan, Principal, IESBA, at geoffkwan@ethicsboard.org.

The International Public Sector Accounting Standards Board® (IPSASB®) has today released four Exposure Drafts (EDs) for public comment:

• Exposure Draft (ED) 76, Conceptual Framework Update: Chapter 7, Measurement of Assets and Liabilities in Financial Statements;
• ED 77, Measurement; 
• ED 78, Property, Plant, and Equipment; and 
• ED 79, Non-Current Assets Held for Sale and Discontinued Operations.

This suite of four EDs are published together to highlight for respondents the common measurement principles proposed and the ways they are applied consistently throughout the draft guidance. The four EDs address several key conceptual challenges and practical implementation issues identified by the public sector community by introducing:

• Straight-forward measurement principles, by way of a measurement hierarchy, that apply throughout IPSAS and align with the Conceptual Framework; 
• Enhanced guidance clarifying the recognition and measurement of infrastructure and heritage assets that are Property, Plant, and Equipment; and 
• A standard that fills a gap for assets held for sale and discontinued operations.

“This package of EDs addresses a range of conceptual challenges and practical concerns identified by our constituents,” said IPSASB Chair Ian Carruthers. “In particular, it provides guidance for the first time on how to address the problems arising from the unique characteristics of heritage and infrastructure assets. The underlying concepts and guidance proposed in this suite of EDs will underpin the IPSASB’s approach to measurement for many years. It is therefore essential the IPSASB hears the views of respondents on the guidance proposed in these EDs.”

ED 76 streamlines the measurement principles in the Conceptual Framework by eliminating unused measurement bases and enhancing focus on those that are commonly used. The ED proposes a clear measurement hierarchy to help stakeholders apply the principles in practice and aligns measurement concepts with the guidance provided in IPSAS.

ED 77 proposes new guidance in a single standard which addresses how commonly used measurement bases are applied in practice. It brings in generic guidance on fair value for the first time, and it proposes a public sector specific current value measurement basis to respond to stakeholder views that a new measurement basis is required as an alternative to fair value for assets held for their operational capacity.

ED 78 updates IPSAS 17, Property, Plant, and Equipment by adding general measurement guidance and measurement options when accounting for assets within its scope, identifying the characteristics of and heritage and infrastructure assets, and proposing new guidance on how these important types of public sector assets should be recognized and measured.

ED 79 is aligned with IFRS 5, Non-Current Assets Held for Sale and Discontinued Operations and proposes new guidance how to account for non-current assets that are classified as held for sale, when they meet specific criteria.

The IPSASB welcomes the views of respondents on the proposed standards and the other matters raised for comment in the four EDs.

How to Comment
To access the Exposure Draft, its summary At-a-Glance document, and the Request for Information or to submit a comment, visit the IPSASB website, www.ipsasb.org. Comments are requested by October 25, 2021. The IPSASB encourages IFAC members, associates, and Network Partners to promote the availability of this Consultation Paper to their members and employees.

About the IPSASB
The International Public Sector Accounting Standards Board (IPSASB) works to strengthen public financial management globally through developing and maintaining accrual-based International Public Sector Accounting Standards® (IPSAS®) and other high-quality financial reporting guidance for use by governments and other public sector entities. It also raises awareness of IPSAS and the benefits of accrual adoption. The Board receives support from the Asian Development Bank, the Chartered Professional Accountants of Canada, the New Zealand External Reporting Board, and the governments of Canada and New Zealand. 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.

The IESBA today released an update on its Long Association Post-Implementation Review (LAPIR). This update provides an overview of Phase 1 of the LAPIR which will review the implementation of a specific partner rotation provision for engagement partners around the world with respect to audits of public interest entities. Phase 1 commences with information gathering activities. Phase 2 is due to commence in Q2 2023.

Click here to download this update.

IFAC, the International Federation of Accountants, which comprises 180 member and associate organizations and represents 3 million professional accountants globally, continues its work to support the establishment of global sustainability standards in the public interest.

In this regard, IFAC endorses the most recent actions announced by the IFRS Foundation Trustees and IOSCO. 

Specifically, IFAC supports the IFRS Foundation’s formation of a working group and efforts to set up a multi-stakeholder expert consultative committee, both of which will accelerate progress towards a successful standards setting board. These steps demonstrate the IFRS Foundation’s focus on delivering with speed by leveraging and bringing together the work of existing initiatives.

IFAC further supports IOSCO’s establishment of a new Technical Expert Group under its Sustainable Finance Task Force, which demonstrates growing international demand for the work of the IFRS Foundation.

IFAC CEO Kevin Dancey said, “IFAC reiterates its support for the IFRS Foundation to establish an international standard setting board with a focus on enterprise value creation, a unique connection to the work of the IASB, and backing from IOSCO and other authorities.  This approach offers the quickest and most effective route to a baseline of internationally consistent sustainability-related disclosures for enterprise value creation developed in the public interest.  IFAC calls for international collaboration and cooperation to make this initiative a success.”

Read Kevin Dancey’s most recent letter to IFAC member organizations here.

At its March 2021 meeting last week, the IAASB approved Non-Authoritative Guidance on Applying ISAE 3000 (Revised) to Extended External Reporting (EER) Assurance Engagements. This guidance marks a significant step forward in supporting the evolving field of assurance for non-financial reporting. To help stakeholders understand the role of both the guidance and ISAE 3000 (Revised), which is the IAASB’s authoritative pronouncement, IAASB Chair Tom Seidenstein has published a new article detailing the guidance and how it supports the application of ISAE 3000 (Revised), growing demands for non-financial information reporting and assurance thereon, and the IAASB’s ongoing commitment to the consistent performance of quality engagements. The guidance will be published in April.

Read more on the IAASB website.

Together with ICAEW, The International Federation of Accountants (IFAC) today released the sixth installment in its Anti-Money Laundering: The Basics educational series: Installment 6: Businesses in Difficulty.  

The publication is part of a 6-month short series helping accountants enhance their understanding of how money laundering works, the risks they face, and what they can do to mitigate these risks and make a positive contribution to the public interest. Installment six looks at businesses experiencing financial difficulties and the increased risk a professional accountant may face to inadvertently facilitate money laundering.

The installment series, with its focus on accessibility and ease of use, will be a resource for Small and Medium Practices (SMPs,) and accountants less familiar with AML, while also providing guidance for those looking for a quick refresher or reference.

Anti-Money Laundering: The Basics is featured on both the IFAC (landing page) and ICAEW websites and available for download for free. To be globally relevant, the series uses the risk-based approach of the Financial Action Task Force (FATF) – the global money laundering and terrorist financing watchdog -- as a starting point. 

For more information about IFAC, visit www.ifac.org.

For more information about ICAEW, visit https://www.icaew.com/.