4. Teaching of ethics by the professional accounting bodies
Paragraph 225(2B)(f) of the ASIC Act requires the FRC to promote, and monitor the adequacy of, the teaching of professional and business ethics by, or on behalf of, the professional accounting bodies to the extent to which the teaching of those subjects relates to auditor independence.
In its 2004-05 independence report, the FRC indicated that the three professional accounting bodies had provided it with detailed information about their courses on business and professional ethics and that it planned to undertake an in-depth examination of this information during 2005-06.
In April 2006, the Treasury, in consultation with the FRC, engaged Ms Jane Walton of Henderson Walton Consulting Pty Ltd to examine the teaching of professional and business ethics by, and on behalf of, the professional accounting bodies. The key requirements of the statement of work for this task are set out in Appendix E of this report.
The examination of the teaching of ethics by, or on behalf of, the professional bodies has found that the depth of understanding of ethical issues of officers of the three professional accounting bodies and of members of accounting firms, their commitment to deal with these issues and steps being taken to do so, is well beyond anything observed in other disciplines, business or professions, including law.
The consultant has also made a number of recommendations on ways to enhance the teaching of ethics in the profession and these are summarised in Appendix E.
The FRC intends to examine the findings and recommendations of the consultant as part of its 2006-07 work programme, including consultations with the professional accounting bodies and other stakeholders.