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April 14, 2014

Trans-Tasman profession raises global profile

Interviewed for The Accountant’s World Survey, Lee White, chief executive of the Institute of Chartered Accountants Australia (ICAA) tells Carlos Martin Tornero how the first cross-border merger between professional bodies in Australia and New Zealand could create an institute with greater influence on the world stage


World Survey 2014: The quest for transparency


The Accountant (TA): The consolidation of professional accounting bodies continues to be a hot topic in the profession (i.e. Canada and Netherlands) – What are your views on this topic? Does the consolidation of accounting bodies benefit the profession?

Lee White: This year, the Institute of Chartered Accountants Australia (ICAA) is embarking on an historic amalgamation with our counterparts in New Zealand and I firmly believe that this new union will benefit not only our members in Australia and New Zealand, but the profession more broadly.

This process is not simply a union of two organisations – it’s about starting anew to create a stronger global accounting body representing 100,000 members based around the world.

Through our new Trans-Tasman organisation, we fully intend to drive innovation in the accounting profession and make the Chartered Accounting profession more relevant and influential on the global stage.

TA: In what jurisdictions or regions have ICAA experienced growth and why?

White: ICAA is currently undergoing a landmark amalgamation with the New Zealand Institute of Chartered Accountants. When finalised, this union will dramatically increase our global membership to more than 100,000 members in more than 100 locations.Our growth in the Asia region in particular continues to be strong – in 2013 it continued to exceed the overall percentage growth of members across the Institute.

This can be attributed, in part to the relationships we have with members, other professional accounting bodies, regulators and employers throughout the region. One of our main areas of focus in Asia is education and training. Our Chartered Accountants Program is offered through our education partners in Malaysia and Singapore, and we co-host regional conferences such as the Conference of the Confederation of Asian and Pacific Accountants.

TA: In what countries do you think your institute will grow more, both in terms of members and students, in the next year?

White: Right now, the growth centre of the global economy lies in Asia which is why we will continue to focus on establishing meaningful partnerships in the region, particularly in the education sector.

Australia is currently one of the most popular destinations for international students in Asia, particularly business and accounting. It’s our aim to improve our education offering so that we remain competitive and relevant in today’s technologically-savvy world.

TA: Is it somehow the profession influential in mainstream decision-making? How does this influence materialise in concrete examples?

White: When finalised later this year, our proposed new institute – Chartered Accountants Australia and New Zealand -will give us greater scale and influence on the world stage and it’s our aim to utilise this to shape decision-making on behalf of the profession.

Domestically, we regularly provide advice to government, particularly in the area of tax, superannuation and education. For example, late last year we provided advice to the government on a range of tax measures that had been announced but never implemented, which were causing confusion among stakeholders. We also had recent success advocating against a proposed cap on the tax deductibility of self-education expenses which the government decided not to proceed with.

This year we are focused on making sure the issue of Base Erosion Profit Shifting [tax planning strategies that exploit gaps] is considered by the G20 during Australia’s presidential year.

TA: What are your thoughts on the recently approved audit reform in the EU?

White: While the full reform package is yet to be approved by European Parliament*, it is questionable whether the benefits of implementing some of the reform measures will outweigh the costs. Regulation of the audit process is important and audits are critical to investor confidence in capital markets. But it’s of equal importance that governments provide a framework for a fair, informed and effective market, without unnecessary regulation.

We believe it is important that any reform for the audit profession focuses on whether changes will improve the framework for the drivers of audit quality, such as the culture within a firm, the skills of staff and the role of audit committees.

The Institute has been part of consultations with European Parliament on its investigation into regulation of audit for over two years. In 2011 we were invited as the only participants outside of the United Kingdom to give evidence to the UK House of Lords’ inquiry into the role and future of external audit.

TA: The EU co-legislators have just agreed on making non-financial reporting compulsory; the International Integrated Reporting Council (IIRC) published its long-awaited framework; there are different projects to expand the auditor’s report…How do you see corporate reporting and assurance changing in the near future?

White: We see assurance of non-financial information increasing in importance as the case for integrated reporting gains momentum globally. Organisations are realising the importance of reporting how they create value, not just from traditional assets such as financial and manufactured capital but also from other factors such as intellectual, human and social capital.

There is also increasing recognition of the need to report more on business models, risks and opportunities as well as an organisation’s future outlook.

 

*Lee White answered TA’s questions before the European Parliament voted in favour of the EU audit reform on 3 April

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