Hello, my name is Gillian Bowen and this is Small Firm, Big Impact.
The importance of trying to set a very robust and good culture and governance within the firms so as to avoid that unethical behaviours, get a space there and may flourish there because the right instruments and the right tools and the right culture is not in place.
It's the podcast giving Chartered Accountants the up to date information they need to do their jobs. Each episode, I share resources, tools and expert advice provided by Chartered Accountants Australia and New Zealand and a range of people across our profession. So get following the pod in your favourite podcast app. Let's start a conversation. Today we have Gabriela Figueiredo Dias, the Chair of the International Ethics Standards Board for Accountants, or IESBA, as it's known. She's in the
studio with me at CA ANZ's headquarters. The topic: why she's in Australia, IESBA's focus for the next few years and how it will impact you. Gabriela, welcome to Small Firm, Big Impact.
Thank you very much, Gillian. It's a pleasure to be here.
For a quick refresher for our listeners, I thought it would be good for you to explain what is IESBA and how IESBA and say, the Australian and New Zealand, because we have listeners in New Zealand as well, how the Australian and New Zealand ethics boards for accountants are all connected. How how does it all come together?
Well, the IESBA is the International Ethics Standards Board for Accountants. It's a global board. It's a global ethics standard setter. And of course it connects and relates with all the local uh, standard setters and professional organizations. This is a standard setter which sets standards for accountants, even if more recently we have been exploring the possibility of extending the application of the standards to other professionals. But typically this
has been a board developing standards for accountants. And so all these organizations in Australia, like in any other countries, are very close work, very close with IESBA, but in many, by many means, these kind of opportunities that we are having now, we have a national standard setters group with whom we meet very regularly. Uh, we also speak with a, with a, with a these organizations as necessary. They relate
with us by responding to our public consultations. So there is a very close relationship.
So what's the purpose of your visit now and the purpose of the visit to Australia?
Well, Gillian, outreach is fundamental for what we do. We are a global standard setter again. So we need to understand what's happening in the jurisdictions, how stakeholders and the profession in particular feels about a lot of issues and and topics and our work. But very recently we have exposed a proposal for sustainability standards. We have published, uh, the new ethics standards for tax planning, and we are
initiating a new work on firm culture and governance. And this made us feel that it was the right time to come to Australia. I'm going to other jurisdictions, but this one was a topical. Yeah. It was the right time to come here and speak with stakeholders. I'm speaking with, uh, the profession, professional organizations, uh, regulators, different regulators. Uh, so it's it's an incredible time here. A busy time, very
busy time, very packed agenda. Exhausting, I must say, but, uh, but very fruitful so far.
Yes, that's right. It's a really good opportunity, as you said, for people to be able to talk to you as well as you talking to them. So on that there's a lot to unpack there. And obviously the listeners of Small Firm, Big Impact will know we try to do as much as we can in 20 minutes or less. So we're having a good old crack here. What is your view on the application of ethics within the profession right now? And looking at it potentially as well, through a lens of Australia and New Zealand?
Well, um, I think that there are improvement, improvements to be made, but I'm positive about improvements being made. So I'm somewhere in between and we are somewhere in between being a little bit concerned about the need to the urgent need to uphold ethics in the profession, and a very positive understanding of what's happening in terms of the awareness
of the profession, of the importance of ethics. So, uh, discussions are being held, developments are being observed, and I think that we should be and we we can be positive and optimistic about the future.
And that sounds to me as well, that you're aware of the work that professional bodies are doing in this space. And I'm thinking in particular through the lens of CA ANZ, the actions and and the movements that CA ANZ has been doing to ensure that it's active in this conversation and is taking steps to ensure that its members are doing the right thing.
Yeah. CA ANZ, like is, is actually very active in the conversations with, uh, with the IESBA. But this is a very particular moment, I would say, because we have, as you can imagine, a lot of organizations around the world
connecting with us. And, um, what we could see yesterday and, and today as well, in the different moments where I had me and my colleagues had the opportunity to be with the CA ANZ and the representatives and members is a relevant, important interest in ethics, a very well understanding of what the IESBA is doing in this space, and awareness of the problems and of the opportunities for the profession. So I think they are playing a very good role.
Mhm, mhm mhm. The IESBA Strategy and Work Plan has recently been finalized, April, I believe it was. And that was after consultation. And I note for those listening along, CA ANZ fed into that so I'll put a link to our, um, involvement. It's an extensive document. We cannot talk about it in this short time. Is there something like maybe three, three takeaways or two takeaways, maybe even one takeaway, if that's all we have time for tha accountants in Australia and New Zealand should know about.
Well, I won't call them probably takeaways but I would I would highlight two topics which are the two main strategic topics that we have identified for the next four years, for the years, but to do work on. And these topics are the firm's culture and governance and the possible extension or expansion of the applicability of the code to non-professional accountants. These are the main strategic topics. Then within these topics we are going to develop work. So it's
very early days. So I'm not able to say what, but what I think that the firms and the professional accountants should retain is one, the importance of trying to set a very robust and good culture and governance within the firms so as to avoid that unethical behaviors, get a space there and may flourish there um, because the right instruments and the right tools and the right culture
is not in place. And the second, which is related to this one, is that accountants, professional accountants are subject to the code of ethics. The IESBA develops ethics standards for the professional accountants. But there are other professionals, other
people doing the same services. So it's in the interest of everybody, namely of the profession and of the users, of the information of the for the public interest that there is a common, consistent framework applying to all of them to avoid that some of them have are subject to a robust set of standards, ethics standards, and the others can be doing the same thing without abiding by any ethics standards or more, uh, more fragile ethics approaches.
So this is important not only from a level playing field perspective to put them all in, in the same, in the same situation, but mostly for the public interest, because it avoids investors and other users of the information to be protected against any kind of wrongdoing and etc. irrespective of who is providing the information.
How do you get to that point of a common, consistent framework? Is that what you will plot out or work towards as this framework goes on in the next few years?
Well, we will explore how much we can do and we should do in that respect. I'm not saying that this is going to change dramatically over the next 2 or 3 years. This is the start of a journey where we will explore together with our stakeholders, stakeholders and namely with the profession, which we have already been doing, how much this is necessary and what we can do
in that respect. Anyway, I see that there is a considerable relevant space where this may happen again for the public interest, but also in the interest of the profession.
Mhm, mhm. You've used the word 'agility'. I'm not sure if you've read the foreword recently of the, of the document, but the word that you put in there or the word that you say is your word for the next four years is agility. Why is that?
I think it's, uh, well, agility because the world is changing. The IESBA is not an island. We don't work in the vacuum. We observe the developments around us, the changes, the the the opportunities, the the threats, the risks. And we respond actively, proactively or reactively to these changes. Now the world is changing very quickly. Things are happening that we could never, never imagine. A few years ago we had Covid, we had the Ukraine war. Now we have the Middle East war and all these things
inflation...
inflation, geographic geopolitical tensions, uh, a lot of things, climate change, which is not one of the minor risks, that one's not going changes. So what we can do upon a very extensive consultation to our stakeholders and our own reflection, is to set a strategy and work plan for the next four years, which is what we can where we are now understand, uh, to be the areas where we can be more relevant. But we are very well aware
that this may change very quickly. There may be developments that we are not expecting, which may, uh, um, force us to reprioritize our initiatives or even to put them, some of them on hold and replace them by initiatives and areas of work that we have not, uh, uh, we had not foreseen. So our stakeholders should be ready to accept that, because traditionally it's not the way IESBA was working, but we have to change as the world changes. So that's why the agility.
I think that's a. Good takeaway from anything that we do that we want. We don't want to keep doing something just because we said we would if it no longer makes sense because you've got improved information, I think that's an important takeaway for me, no matter what you're doing. Look, two questions to go because I'm conscious we're almost out of time
and I'm trying to keep it short, snappy and happy. Um, I think it's important because of the listeners that we've got to talk about the work that you've been doing on tax planning and related services. You mentioned it at the start, but what is it that you're doing in that space, and how is that relevant to people who might work in smaller or medium sized firms rather than in the big firms?
Well, I think that this work will be relevant to everybody.
Love that...
...to be to be frank, these are very recently issued published ethics standards, ethics standards for tax planning. They were published last month after the approval of the PIOB, the public interest (oversight board), not the approval, the certification of the PIOB. And we are exactly now rolling out, making professional accountants aware of the existence of these standards and making them
understand how they work. The idea of these standards is to provide all professional accountants ... I mean, professional accountants in business or professional accountants in public practice, with a very robust framework for to help them navigate the ethical dilemmas that they may face when providing tax planning services. It's not about what's forbidden, because what's forbidden is forbidden. It's it's illegal so that's not our space. What's absolutely
and clearly legal and acceptable. It's not our space. Our space is the space in between what we call the gray area that is very relevant in this space and which, um, speaks to these problems or these moments where the tax planning provider knows that something can be legal or can be considered illegal. But beyond the legality, the pure legality of the of the situation, there are ethical considerations to be, uh, taken, uh, to be to be to be well, to be considered. Mm. Uh,
if I may. So, uh, and this is exactly what we are trying to help professional accountants do and to protect them, to protect the public interest, of course, to protect their clients and to protect themselves against the consequences of any actions, any situations where they provide they provide tax services, tax planning services. And this can be considered not only illegal, but more than that unethical and create severe reputational issues, financial, uh, consequences against the provider and
the profession more generally. So it's really a framework which is conceived for the public interest. That's what we work for, but that we, uh, suppose, imagine and and believe that will help immensely professional accountants in the, in the in providing tax services. Now the question is should they apply to others as well, not only to tax planning to
professional accountants providing tax planning services. Yeah, we encourage that the application and adoption by others consultants, lawyers uh, namely which are doing exactly the same thing, but to whom these standards don't apply directly. In an ideal world, all of them would be abiding by the same ethical standard and taking the same considerations into their work when providing tax planning services.
I like that um, line you explained there. I think it sums up your work really well, the area or the space in between. And that is where people get into trouble and need and need the guidance. So then you've touched on it a little. My final question before we wrap up then is, um, what do you think the impact will be on accountants, um, in their day to day with this work that you're doing in this space?
I think it's going to be a very positive impact. There are some, some situations where, uh, professional accountants may think that this is an additional burden or additional things
that they have to do. This is really about bringing, putting in a very objective and clear way how a process, a certain approach to the work that they should take to avoid problems, to put it in a very simple way to avoid significant problems for the public interest and for themselves, that may arise of a inadvertently most of the times of uh, conducts behaviors in providing, uh, tax planning services, which may result from a purely automatic, uh, um, legal approach to the, to the law.
Um, now I've asked all the questions. Is there anything that you would like to say about anything that you haven't had the opportunity to say yet before we go?
Well, I think that, uh, my message is always, uh, the same. I think that what I'd like to say is that I'd like to see, uh, the profession, um, upholding ethics and, uh, more and more taking ethics into the centre of everything they do and realize that this is really a systemic risk and a great opportunity for them to make a difference. So I want the, the, the profession to become, uh, ethical champions, not only compliance.
I love that. Look. We've tried to pack a lot into a short time. This is all we have time for. I'll put a link to the IESBA Strategy and Work Plan into the podcast episode, show notes, as well as a link to the CA ANZ submission for anyone wanting to read any more information.
And our team, of course, will continue to communicate with you about how this work impacts you through the usual ways obviously newsletters, webinars, events, etc. so if you aren't receiving the information you need, please check your communication preferences in MyCA. There'll be a link to that in the show notes as well. If you want to get in touch with the podcast, email us podcast@charteredaccountantsanz.com and follow the pod.
Let's start a conversation. Thank you Gabriela Figueiredo Dias for being my guest on Small Firm, Big Impact.
Thank you.
Bye bye.