New sustainability reporting standards are on their way. 

The agencies behind Australia’s accounting and auditing standards are contributing to a global process for two proposed new sustainability standards, dealing with general sustainability disclosures and climate reporting.

The standards are officially set by the London-based International Sustainability Standards Board, with a local version to be issued in Australia soon after.

The standards have legal backing and will be subject to surveillance and enforcement by Australian regulators.

“Currently, audits of financial reports are provided by practitioners who are members of the professional accounting bodies, with ‘Registered Company Auditor’ being the designation required by Corporations Law,” says the chair of the Auditing and Assurance Standards Board (AUASB), Bill Edge.

“Auditors are required to comply with a Code of Ethics, promulgated by the Accounting Professional and Ethical Standards Board.

“These principles establish the standard of behaviour expected of a member of the professional bodies. The fundamental principles are integrity, objectivity, professional competence and due care, confidentiality and professional behaviour. Independence standards are a key element of the Code.”

Some specialist practitioners can provide assurance on sustainability issues, but they are not always subject to the same rules and ethical standards as members of professional accounting bodies such as CPA Australia, Chartered Accountants – Australia and New Zealand, and the Institute of Public Accountants.

“What appears to be a threat to the future of the professional accounting bodies because of competition from new providers can be an opportunity for them to grow their size and enhance the credentials of their members,” Mr Edge says.

“They could support members as prescribed assurers, either by advocating relevant regulation or by promoting the reputation of members of the accounting profession.”

More details are available in Mr Edge's paper in the latest edition of CPA Australia’s Australian Accounting Review.