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The International Ethics Standards Board for Accountants (IESBA) has launched a standard-setting project on accountancy firm culture and governance, following a fact-finding report on the matter.
The project aims to develop a “principles-based” culture and governance framework for accounting firms that promotes, supports and reinforces a high standard of ethical behaviour across all professional services.
As part of this initiative, IESBA will also develop non-authoritative materials on the importance of ethical behaviour in accounting firms, and to support firms with guidance on embedding ethics into their strategies and operations.
The initiative stems from recommendations made by IESBA’s Working Group on Firm Culture and Governance in its recently released fact-finding report.
Following a series of well-publicised ethical failures within the sector in recent years, IESBA has made accounting firm culture and governance “a strategic priority”. It established the Working Group to gain a better understanding of culture and governance, and the impact of these factors on compliance with ethical requirements by accounting firms and networks.
IESBA will conduct a series of in-person and virtual global round tables in March and April this year to gather views from a broad range of stakeholders. It will consult on proposed new standards and authoritative material in due course.
David Gomez, ICAEW senior adviser on ethics, said: “ICAEW welcomes IESBA’s focus on promoting ethical culture in firms. We had very positive discussions about this when our President, Malcolm Bacchus, and CEO Allan Vallance hosted the IESBA chair at Chartered Accountants’ Hall last year.
“We also met with the IESBA Working Group as part of its outreach programme and facilitated introductions to UK academics and firms, to ensure that our perspectives were heard.”
He added: “Some firms have already implemented an ‘ethics by design’ approach. In very broad terms, this requires organisations to acquire a thorough understanding of their decision-making processes, procedures and information flows.”
