Distinguished Chair and Chief Executive, Board members, distinguished guests, ladies and gentlemen, dear colleagues,
It is a great pleasure and a privilege to join you today in celebrating the 20th anniversary of the Accounting Professional & Ethical Standards Board.
Anniversaries such as this are important moments. They invite us to look back with a sense of achievement – but also to look forward with clarity and purpose. To reflect not only on what has been built, but on what must be sustained, strengthened, and, where necessary, reconsidered.
Over the past two decades, APESB has established itself as a cornerstone of the Australian accounting ecosystem. Its contributions go beyond the development of high-quality standards. It has critically helped shape a system grounded in professionalism, accountability, and a clear commitment to the public interest.
Australia, and APESB in particular, has also played a distinctive role internationally, both contributing to and drawing from global developments. This is reflected, on the one hand, in your longstanding contribution to the development of global ethics and independence standards; and on the other, in your strong commitment to their timely and effective adoption and implementation. Your work has consistently shown how global standards can be translated into effective national practice – how principles can be put into action in real-world contexts, and how local experience can, in turn, inform and improve global thinking.
This dynamic between global and local standard-setting is not a compromise. It is a strength we very much value and cultivate at the IESBA.
Global standards provide consistency, comparability, and a common foundation. In our case, a shared approach to ethics and independence.
But they only achieve their purpose when they are implemented, tested, and challenged in practice. Jurisdictions such as Australia play a critical role in that process, acting not only as key contributors to their development, but, often, also as early adopters, as has been the case very recently with the sustainability and tax planning standards.
The collaboration between the IESBA and APESB over the years is a clear example of this mutually reinforcing relationship. It is a partnership that has strengthened both the global framework and its local application, serving as a powerful tool against fragmentation and ultimately supporting public trust in markets, institutions, and the profession itself.
And yet, as we all know, no system – regardless of how strong it is – is immune to failure. Australia is certainly not alone in experiencing the profound costs of such shortcomings. Time and again, across regions, jurisdictions and firms, we have seen how ethical failures and misconduct can cause serious harm.
But each case, each failure, each headline should also serve as a reminder: standards, rules, and regulations are not sufficient on their own.
They must be supported by something deeper.
Ladies and gentlemen,
We are entering a period of significant pressure and transformation.
First, we are witnessing increasing geopolitical tension and fragmentation. Regulatory approaches are diverging, global cooperation is being tested, and, in some cases, the value of common frameworks – including ethical frameworks – is being questioned.
Second, technological change – particularly, but not only, artificial intelligence – is transforming the profession at a speed and scale we have not experienced before. We are no longer experimenting with it; we are moving into full-scale implementation. This is reshaping how information is produced, analyzed, and assured. It is also challenging the boundaries, and certainly increasing the relevance, of professional judgment and responsibility. And even the distribution of market share, business models and human resource policies.
Third, economic pressures are intensifying. Given the tensions and uncertainty around us, which have been recently aggravated by the Middle East war and the consequent energy crisis, it is not surprising to see subdued growth, inflationary pressures, increased economic and geopolitical competition, and financial strain in global markets. These developments will place new demands and risks on firms and professionals. And, as we know, when pressure increases, so do ethical tensions, particularly between commercial objectives and professional obligations.
In this environment, the question is not whether ethics is relevant. The question is whether we can navigate without it.
Because if we take a step back, it becomes clear that, in the current context, the role of ethics underpinning the accounting profession has never been more important.
At its core, the profession is about trust.
Trust in the information that supports decision-making. Trust in the judgment applied in complex and uncertain situations. Trust in business and in the functioning of markets and economies.
And trust is most valuable precisely when uncertainty is highest.
Today, professionals are increasingly required to make difficult judgments under pressure, in brand new areas, often with scarce previous experience, incomplete information and competing expectations.
We see this clearly in sustainability reporting and assurance. The expansion of sustainability frameworks brings significant opportunities, but also significant risks. Data is often incomplete, methodologies are evolving, and expectations are high and volatile. Trust in sustainability information is still catching up with its rapid growth. The risk of greenwashing, whether intentional or not, is real.
We see it in the use of artificial intelligence. AI has enormous potential to enhance efficiency and insight. But it does not replace human judgment. On the contrary, it makes ethical judgment more critical, particularly in terms of bias, accountability, transparency, and the appropriate use of technology.
We see this in emerging domains, such as valuation of digital assets or defense-related assets and businesses, both becoming prominent in the global landscape. Or regarding new structure and governance realities for the firms, like the ones being shaped by the rapid growth of private investment in accounting firms.
And we see it in a world that is becoming more fragmented. When regulatory and market environments diverge, a common and robust ethical foundation becomes even more essential to maintain trust and consistency.
In all these areas, ethics is not theoretical. It is practical. It enables professionals to navigate complexity, to make sound decisions, and to act in the public interest. These new challenges are requiring us all – regulators, standard setters and the profession – to reaffirm, in our actions, the relevance of ethics and independence standards, and to re-imagine how they apply and can help the profession in an ever-changing environment.
We must also be clear about the risks.
When ethical failures occur, their impact is rarely contained. They extend beyond individual professionals or firms, reaching the credibility of the profession and the system as a whole. They can put at risk the very license to operate and undermine confidence in financial and non-financial reporting, governance, and the functioning of markets and institutions.
The risk of failure, therefore, is not only reputational or financial. It is systemic. No wonder standard setters and regulators care so deeply both about preventing such failures, and about ensuring the robustness of the infrastructure supporting the system.
And, ultimately, the risk of failure could also be existential. That is why all of us here today are called to work together.
A profession that loses trust, which is exactly what it is meant to provide, risks losing its legitimacy and its relevance. And once relevance is lost, it is not easily regained.
This is why the experience in Australia is so important. Because it does not only show us success. It also shows us how systems respond under pressure.
And what has Australia shown us?
First, the importance of strong institutional infrastructure. Independent standard-setting bodies such as APESB, supported by appropriate governance, resources, and safeguards, are essential to maintaining credibility and trust.
Second, the importance of taking failures and the lessons learned seriously and responding to them with rigor and transparency.
The response to recent events, including parliamentary investigations, the findings of the Ziggy Switkowski review, and subsequent actions taken, including by some firms, illustrate this point. The focus on strengthening the governance to improve the culture, enhancing risk and ethics frameworks, reinforcing accountability, and increasing transparency, reflects a recognition that culture and systems must evolve together.
Ladies and gentlemen,
What matters is not the absence of failure.
What matters is how systems prevent or respond to it and whether they emerge stronger.
Trust is not built by any single institution. It is the result of the combined efforts of standard setters, regulators, firms, professional accounting associations, professionals, and policymakers. And when trust is challenged, it must be rebuilt collectively.
This is a third lesson from the Australian experience.
From these reflections, a broader question emerges: what are the conditions for a strong, resilient, and relevant profession globally? What is needed to help the profession and firms prevent harm, rather than experience it and learn from it at very high costs?
In my view, two conditions must hold anywhere in the world.
From what I’ve said so far, you will not be surprised to hear that the first is a robust ethics standard-setting infrastructure.
This requires strong and adequately resourced global standard setters that operate in the public interest, with independence and authority, and under appropriate oversight to ensure all these requisites.
A standard setting system whose integrity and independence are unquestionable, in fact, and in appearance.
A system that stands shoulder to shoulder with the most sophisticated and credible international standard setters, working professionally and independently for the public interest.
In short, a system that the end users and beneficiaries, such as companies, banks, and investors – including superannuation and pension funds, can trust and rely upon.
It also requires global consistency. Ethical principles cannot and should not vary depending on geography.
At the same time, this global framework crucially relies on strong jurisdictional standard setters – such as APESB – that both contribute to the development of global standards and ensure their effective implementation and adaptation to local realities. A two-way dynamic that has been proven to be highly successful.
The second condition is strong culture and governance within firms.
Rules guide behavior, but culture determines it.
Without ethical leadership, without robust governance mechanisms, without accountability, without the right incentives and without transparency on ethical performance, even the best standards, codes or rules will fall short of their objectives.
Experience has shown us that ethical behavior within firms depends not only on individual professionals, but also on the environment in which they operate. On leadership, on governance approaches, and on the organizational systems that support ethical decision-making.
This is why the IESBA, as you may know, is developing work in this area under its Firm Culture and Governance project. Strengthening the ethical foundations of the profession requires addressing both the “rules” and the “reality” in which those rules are applied.
This is even more important when that “reality” is changing at an unprecedented speed, driven by technology, geopolitical developments, and changes in ownership structures, particularly through private equity investment.
Ladies and gentlemen,
As I come to the end, I would like to share a final thought with you.
When we talk about trust, and the ingredients for success in such a demanding environment, we are not only dealing with present challenges. We must also be preparing ourselves for future ones.
Whether those shocks are geopolitical, technological, or economic, they will test the resilience of our systems and the strength of our ethical foundations.
Short-term approaches that weaken ethics and independence may appear attractive in the moment. They may promise efficiency or flexibility. But they come at a high cost.
A cost that, as history shows us, is often only fully understood when it is too late.
We all know that trust is built over decades but can be lost in moments. And sometimes, it is never fully recovered.
That said, I am an optimist. I believe there is reason for confidence. We share the willingness and the means to build a strong future for ourselves and for those who will follow us. And we continue to develop and refine the tools we need to do so.
There could be no better place to reflect on the future of the profession than here, among a community that has spent 20 years building and strengthening those foundations. The work of APESB, and of the broader Australian ecosystem, shows what is possible when institutions and professionals come together to serve the public interest.
The future of the profession will not be defined by technology alone. Nor by regulation alone. And certainly not by standard setters alone.
It will be defined by its commitment to ethics and independence. And by its capacity to adapt and evolve, without which all other transformations will ultimately fail.
In uncertain times, ethics is not a constraint. It is our compass for resilience and success.
So, in closing, let me offer my sincere thanks to APESB for the exemplary and unwavering commitment to building and refining this compass over the past two decades.
I look forward to continuing our partnership in the years ahead, as we strengthen the ethical foundations on which trust – and the profession itself – ultimately depends.
Thank you very much.
