Media Release
2008 / 01 – 25 February 2008
FRC releases Banarra report on ethics in accounting firms
Australian accounting firms are investing significant resources to ensure compliance with independence and quality requirements, according to a report released today by the Financial Reporting Council (FRC).
The FRC commissioned The Banarra Trust, in May 2007, to review ethics in practice in seven accounting firms. The report, titled Evaluation of how professional and business ethics are applied in practice by accounting firms, shows that ethical practice is highly valued by Australian accounting firms to build reputation and brand.
FRC Chairman, Mr Jeffrey Lucy AM, said that while it is excellent to see Australian accounting firms taking the development of ethical behaviour seriously, there remains some tension between a principles-based versus rules-based approach to encouraging ethical behaviour in the profession.
“The FRC intends to take greater leadership by facilitating debate on the dynamic and evolving tensions between the different approaches to further encourage ethical behaviour within the profession,” Mr Lucy said.
The report recommends encouraging the professional bodies and the Accounting Professional and Ethical Standards Board (APESB) to consider establishing a mechanism that facilitates the sharing, reviewing and critiquing of leading ethical practices. This would demonstrate the commitment of the profession to ensuring that, as a whole, it is driving the highest ethical standards.
It also recommends that accounting firms and professional bodies identify a core set of indicators for cultural health and ethics in practice. Additionally, the report suggests firms should review their approach to evaluating ethics training with a view to extending from measuring outputs to include outcomes.
The Banarra report is available online at www.frc.gov.au.
The FRC is seeking public comments on the consultant’ s recommendations. Comments should be sent to the FRC Secretary at frcsecretary@treasury.gov.au by 31 March 2008.
Media Enquiries:
Ms Suzanne Howarth,
FRC Secretary
Email: frcsecretary@treasury.gov.au
Telephone: +61 2 6263 3144