The Accountancy Profession: Building Trust and Enabling Sustainability

1. Sustainability as a Mandate and an Opportunity

Our profession needs to meet the huge demand – and an important need – for the professional accountant’s skillset in gathering data, developing systems and processes, and ensuring that information is actionable and relevant to strategies and business models. And of course, at the end of the day, someone needs to ensure there is confidence in the reporting of this information.

IFAC spent much of the past two years campaigning among all our stakeholders and partners for the establishment of the new International Sustainability Standards Board (ISSB) under the auspices of the IFRS Foundation. Its formation in November 2021 was an important step towards meeting stakeholder demand, and supporting the United Nations 2030 Agenda for Sustainable Development, notably the implementation of the Sustainable Development Goals (SDGs).

Just as IFAC supported the Board’s formation, we welcome its initial activities. Now it is critical to maintain momentum. For the ISSB’s standards to have a truly global reach, jurisdiction-level adoption and implementation is key.

2. Independent Assurance of ESG Information: IFAC’s State of Play Findings

The assurance of sustainability information has also emerged as a crucial factor in climate action and sustainable development. In July, IFAC released an update to our State of Play study of global trends in the reporting and assurance of sustainability information.

Of course, there is also an enormous opportunity for our profession in the market for these services. But speed is essential. The market will reward early adapters to new demands and new opportunities in the sustainability space.

3. The Importance of Trust & The Institutional Deficit

We see the importance of trust and confidence in corporate disclosures and their assurance; in the close relationship between small- and medium-sized enterprises (SMEs) and small- and medium-sized practices (SMPs); and in public financial management (PFM).

The public sector is pivotal to effective responses to the many overlapping global crises: Covid, inflation, disrupted supply chains, the food shortages gripping the world, and, of course, climate change. Citizens everywhere are looking for their governments to respond to their current and future needs and bring about a more sustainable, inclusive and equitable future.

In a time of extraordinarily low trust in institutions, it is critical that the public sector rises to the occasion with strong PFM. Poor governance has eroded the reputation of social institutions and may threaten their legitimacy. We can see this in data from Edelman, the global communications firm, which releases annual global surveys of public perceptions of business, governments, not-for-profits, and the media.

The question for our profession is how we can help to rebuild and maintain trust across society. We are a public interest profession with a history, stretching back well over 100 years, with the mandate, the skills, and the strong reputation to do exactly this.

4. Public Financial Management, Corruption & The SDG Financing Gap

The United Nations estimates that USD 5 to 7 trillion in investment is needed annually to achieve the Sustainable Development Goals, or SDGs. At the same time, about half that amount is lost to corruption each year. Society could not afford this massive leakage before the pandemic, and certainly cannot afford that cost now.

The global accountancy profession has a very important role to play here. We are uniquely placed within, and as advisors to, business and government. And we are uniquely placed to support an ecosystem of other public policy actors at the global, regional and national levels – all in the public interest.

5. Public Trust in Tax: Global Perspectives & Anti-Corruption Action Plan

In September, IFAC – in partnership with the Association of Chartered Certified Accountants (ACCA) – launched the comprehensive report titled “Public Trust in Tax: Global Perspectives,” marking the inaugural initiative under IFAC’s new Anti-Corruption Action Plan.

Since 2017, IFAC has gathered empirical data across the G20 on public attitudes and opinions towards tax systems and the stakeholders operating within them. The latest research expanded to 14 non-G20 countries, surveying 5,600 citizens regarding institutional trust, key concerns, and expert insights from accounting practitioners, academics, and revenue authority officials.

Regardless of the true reasons behind poor delivery of public services, this apathy or distrust will discourage compliant taxpayers from continuing to pay their share. Compliance depends on a perception of fairness in the system, and the effective and efficient use of taxes paid for the benefit of society.

The good news is that the profession has the skills, expertise, and the credibility to do something about this. No one was more trusted than professional accountants. And this has been the case for every country and every iteration of our Trust in Tax work, going back to 2017.

Our profession needs to speak out, speak up, and lead on trust – not just trust in tax, but across the public sector and among all organizations, including businesses. We must ensure that our stakeholders in government know when to call on us. As technical experts with a strong ethical foundation, we can help public authorities to implement policies effectively and efficiently – and with accountability. As professionals, we will bring greater transparency and integrity to public finances. As servants of the public interest, we will advocate for policies that create a better world.

6. Trust in the Ecosystem of Corporate Governance

Our profession cannot rebuild trust alone. Achieving high-quality assurance – a requirement for trust and confidence in corporate disclosures – requires a well-functioning ecosystem of corporate governance built upon ethics and independence.

While assurance has historically focused on enhancing the confidence of investors and other providers of capital, other stakeholders also benefit, including directors, management, employees, analysts, regulators, rating agencies, customers, suppliers and the public.

7. Accountants Will Save the World: Competencies, Reach & Action