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Q. Can you tell us a little about the role of the IESBA?
Gabriela Figueiredo Dias: The International Ethics Standards Board for Accountants (IESBA is an independent, global standard-setting board that develops the International Code of Ethics for Professional Accountants (including International Independence Standards) (the IESBA Code) in the public interest. The IESBA Code provides a robust, comprehensive, and dynamic set of ethics standards, including auditor independence requirements, that underpin the ethical behavior of all professional accountants in business and in public practice. These standards, which are developed in accordance with a rigorous due process overseen by the Public Interest Oversight Board (PIOB), present a consistent alignment of ethical values and approaches with respect to the preparation and assurance of corporate reporting.
The IESBA Code requires professional accountants to always act in the public interest and it underpins the profession’s good reputation. The strength and resilience of our code are evident as it has been adopted or is used in over 130 jurisdictions, translated into about 40 languages, and adopted by the 34 largest international networks of accounting firms for transnational audits. In short, it is one of the greatest assets of the profession and it is what makes the profession stand apart.
Alongside the development of ethics standards, the IESBA clearly plays a role in creating a strong awareness among stakeholders of the relevance of ethics in business to support trust, and in helping to build an ethical culture within the profession and the organizations in which, or for which, professional accountants work.
Q. The Board Meeting is being held in the Middle East for the first time, how important is that for the region?
Gabriela: Holding our Board Meeting in Abu Dhabi is important because it will allow our work and messages to reach new audiences, which will help further promote ethics as an integral part of sustainable businesses and economies worldwide. We are bringing to a key region of the world the proposition that ethics is fundamental to public trust in the financial markets and in business and organizations. The recurrence of corporate scandals around the world makes it clear that without strong ethics, there are significant risks to market integrity and resilience, and to public confidence in private enterprise and public institutions alike. Ultimately, the pervasive lack of trust can undermine the economic system and the welfare of the people.
The timing of our meeting in the United Arab Emirates is auspicious as it aligns with the UAE’s Year of Sustainability, as well as with the commitment of our host, the Abu Dhabi Accountability Authority (ADAA) to raising awareness of the principles of accountability, integrity, and transparency. We look forward to the opportunity to engage with the ADAA and to exchanging perspectives and ideas on sustainability and other issues of mutual interest.
The ADAA is tasked with ensuring the most efficient use, and protection, of public funds and resources across all Abu Dhabi government entities, driven by principles of good governance, accountability, integrity, and transparency, and as such is the ideal partner for the IESBA for this event. The Middle East in general, and the UAE in particular, are major players on a global stage, and it is beneficial to all parties concerned that consensus is reached to ensure consistency, clarity, and confidence in a Code of Ethics generated by mutual respect for our core values.
Q. The theme for the IESBA Board Meeting is “Building the Ethical Foundation for Sustainability”. How does ethics relate to the many issues surrounding sustainability in today’s world?
Gabriela: Demand for timely, relevant, and trustworthy sustainability information has risen dramatically in recent years. Because this new information is increasingly being used to support capital allocation or other decisions by investors, customers, workers, government agencies, and other stakeholders, it is important that it is as reliable as existing financial information. Without strong ethics in the production, reporting, and assurance of sustainability information, there are significant risks of issues such as “greenwashing” (i.e., the misrepresentation of the extent to which an entity’s products, services, or activities are sustainable), conflicts of interest, non-compliance with laws and regulations, and pressure to act unethically.
There is also an imperative to address the ethical expectations of providers of sustainability assurance services outside the accountancy profession. The landscape of ethics requirements for those other assurance providers is highly fragmented, and in most cases, not as robust and comprehensive as those of the global accountancy profession. The IESBA follows a robust journey in developing standards under the PIOB’s oversight. This gives credibility and legitimacy to the IESBA standards and ensures their public interest responsiveness. Leveling the playing field for ethics standards with respect to all sustainability assurance providers in the public interest is a strategic priority for IESBA.
Further, as sustainability reporting leads professional accountants into new areas outside their core expertise, particularly in relation to environmental, social, and governance matters, they will need to rely increasingly on experts in these fields. Establishing a sound ethical foundation for the use of experts in reporting and assuring both financial and non-financial information will therefore be critical.
More broadly, as I touched on above, ethics is central to market integrity and trust in private enterprise and public institutions. Promoting an ethical culture in business and organizations based on the robust principles of the IESBA Code serves to guard against fraud, bribery and corruption, money laundering, tax evasion, and other economic crimes. Ethics, therefore, ultimately underpins the sustainability of the economic system for the benefit of society.
Q. What agenda will the Board Meeting follow?
Gabriela: The agenda includes multiple sessions dedicated to sustainability, as the IESBA looks to fulfill its commitment to develop a global baseline of ethics and independence standards for sustainability reporting and assurance within the next two years. The Board will also finalize a consultation paper on its strategy and work plan for 2024-2027.
We are also hosting a panel discussion with myself and Prof. Jens Poll, a fellow IESBA Member, which will take a deep dive into the roles of ethics and the accountancy profession in enhancing ethical culture within organizations, the roles of the profession and other key players in the global fight against economic crime, and how putting ethics at the top of the business, public policy, governance, and regulatory agendas will contribute to advancing sustainability goals and protect the public interest.
Q. Finally, what do you hope that the main outcomes of the Board Meeting will be?
Gabriela: First and foremost, in relation to sustainability, I am eager to keep the momentum the Board has seen over the past year going. The sustainability standards we are developing will form the third pillar in the global standards infrastructure needed to deliver transparent and trustworthy sustainability information, alongside the global sustainability reporting and assurance standards being developed by the International Sustainability Standards Board (ISSB) and International Auditing and Assurance Standards Board (IAASB), respectively. I also look forward to finalizing the consultation paper on our next strategy and work plan and getting that plan out to our stakeholders for their review and feedback.
Finally, I hope to build a solid and enduring working relationship with the ADAA and other key stakeholders joining us for the meeting. As a global organization, we place a high value on the input from all our stakeholders as they bring unique and important perspectives to our standard-setting process.
The Board Meeting will run daily from Monday, March 13 to Friday, March 17. The public is welcome to observe the meeting by registering in advance at www.ethicsboard.org/meetings.
