Welcome to Professionalism

Issue 45

In this issue we provide updates on APESB's activities and technical projects for
Jan to Mar 2025.

Exposure Drafts Open for Comment

New Ethics and Independence Standards for Sustainability Reporting and Assurance (ED 01/25 and ED 02/25)

APESB is seeking feedback on two Exposure Drafts which propose amendments to APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) to facilitate the mandatory sustainability reporting and assurance regime in Australia:

• Proposed Australian Ethics Standards for Sustainability Assurance (including Independence Standards) and Other Revisions to the Code Relating to Sustainability Assurance and Reporting (ED 01/25); and
• Proposed Revisions to the Code Addressing the Work of an External Expert (ED 02/25).

The proposed amendments incorporate recent revisions made by the IESBA to the International Code in January 2025 (further details are in the Sustainability-related Developments section below).

The new standards will provide ethical guidance to sustainability reporting and assurance practitioners to deliver the mandatory climate-related financial disclosures and sustainability reports now required for Group 1 Entities in Australia from 1 January 2025. The higher Independence Standards in the new proposed Part 5 are interoperable with ASSA 5000 General Requirements for Sustainability Assurance Engagements, issued by the Australian Auditing and Assurance Standards Board (AUASB) in January 2025.

Stakeholder comments are requested by 12 May 2025.

Read the Media Release, the Sustainability ED 01/25, and the Experts ED 02/25.

New Ethical Standards for Tax Practitioners

On 31 January 2025, APESB issued the Amending Standard Revisions to APES 110 Code of Ethics for Professional Accountants (including Independence Standards) Addressing Tax Planning and Related Services. The new framework, set out in sections 280 and 380 of the Code, supports professional accountants in applying their judgements, decisions and actions for tax planning in a manner that also meets the public interest by minimising the occurrence of unethical tax practices. 

The changes to the Code have also resulted in consequential amendments to the existing APES 220 Taxation Services (APES 220). The amendments to the Code and APES 220 will be effective for professional activities commencing on or after 1 July 2025, with earlier adoption permitted.

Read the Media Release, the APES 110 Amending Standard, the Basis for Conclusions, the revised APES 220 and the APES 220 Technical Update.

Revised Corporate Finance Pronouncements Issued

On 22 January 2025, APESB issued the following revised versions of the Board's Corporate Finance Pronouncements:

• APES 345 Reporting on Prospective Financial Information Prepared in connection with a Public Document (APES 345)
• APES 350 Participation by Members in Public Practice in Due Diligence Committees in connection with a Public Document (APES 350)
• APES GN 31 Professional and Ethical Considerations relating to Low Doc Offering Sign-offs (APES GN 31)

The changes in the revised pronouncements were to maintain alignment with definitions within the Code. The revised APES 350 was also updated to include an additional explanatory sentence in respect of the definition of "Listed Entity".

The revised APES 345 and APES 350 are effective from 1 April 2025, with early adoption permitted.  The revised APES GN 31 is effective as of the date of issue. 

Read the revised APES 350, the APES 350 Technical Update, the revised APES 345, the APES 345 Technical Update, the revised APES GN 31 and the APES GN 31 Technical Update.

Revised APES GN 20 Scope and Extent of Work for Valuation Services

On 16 January 2025, APESB issued the revised APES GN 20 Scope and Extent of Work for Valuation Services, which is effective as of the date of issue. The key changes consist of updating cross-references to the Code and to APES 225 Valuation Services. Read the revised Guidance Note and the related Technical Update.

APESB March 2025 Board Meeting

APESB held its quarterly Board meeting on 6 March 2025. The Board approved the two sustainability-related Exposure Drafts (as noted above), received an update on the IESBA’s Firm Culture and Governance Project and noted the 2025 APESB Issues Register. The Board also received an update from the AUASB Chair, Mr Doug Niven on the newly effective Sustainability Assurance Standards.

In a video clip posted on LinkedIn, Mr Channa Wijesinghe, APESB’s CEO, provides an overview of key decisions made and projects discussed at this meeting, or you can read the highlights of the March 2025 Board meeting here.

International Developments

IESBA Board Meeting

The IESBA held a Board meeting in person in New York between 10-12 March 2025. APESB CEO, Mr Channa Wijesinghe attended these meetings in his capacity as the IESBA's Vice Chair.

During the meeting, the IESBA considered and approved a Consultation Paper on Collective Investment Vehicles (CIVs) and Pension Funds. The Consultation Paper is expected to be issued by the end of March 2025. The Board also received an update on the Firm Culture and Governance Project and the plans for implementing the international sustainability ethics standards from the Adoption & Implementation Working Group. Click here for the Board Meeting Papers.

The next IESBA Board meeting will be held on 9-12 June 2025 in New York.

Melbourne Roundtable - IESBA Firm Culture and Governance Project 

On 20 March 2025, the IESBA held a roundtable in Melbourne, Australia on its Firm Culture and Governance project.  The roundtable was co-hosted by CPA Australia and the APESB, with the IESBA Vice Chair and APESB CEO Mr Channa Wijesinghe, IESBA Board Member Mr Rich Huesken and IESBA Director Mr Geoff Kwan moderating the discussions. 

The roundtable was attended by a range of stakeholders including accounting firms, professional accountants in business, professional accounting bodies, national standard setters, regulators, academics, the public sector, investors and the business community.

Sustainability-related Developments

Global Sustainability Ethics Standards released by IESBA

In January 2025, the IESBA released two final pronouncements on ethics standards for sustainability reporting and assurance:

• International Ethics Standards for Sustainability Assurance (IESSA) and related revisions to the International Code of Ethics for Professional Accountants (including International Independence Standards); and
• Revisions to the Code on the Using the Work of an External Expert.

The IESBA also published a range of guidance and publication materials on the standards. Read the Ethics for Sustainability Reporting Fact Sheet, the Ethics & Independence for Sustainability Assurance (IESSA) Fact Sheet and the Using the Work of an External Expert Fact Sheet.

Further information can be found on the IESBA's Sustainability and Assurance Reporting website.

IESBA/UK FRC Outreach in Australia

From 19 to 26 February 2025, the IESBA Board Member and FRC UK Executive Director of Regulatory Standards Mr Mark Babington visited Australia for stakeholder outreach activities. APESB CEO and IESBA Vice Chair Mr Channa Wijesinghe joined Mr Babington in some of his outreach activities (as noted below). 

The professional accounting bodies created a range of opportunities for Australian stakeholders and professional accountants to engage with Mr Babington on topics related to Sustainability Reporting and Assurance, as well as UK Audit and Regulatory Developments.

CPA Australia Workshop on the Potential New Obligations for Auditors

On 18 February 2025, Mr Channa Wijesinghe and Mr Mark Babington presented at the CPA Australia workshop, discussing potential new obligations for auditors. The workshop provided a comprehensive overview of the global landscape of auditors' ethics standards for sustainability assurance, including crucial independence standards and the specific ethical obligations of auditors in Australia as they prepare to engage in sustainability assurance.

Sustainability Standards Panel Discussion Lunch Event at the IPA

On 19 February 2025, Mr Channa Wijesinghe and Mr Mark Babington presented at the IPA Sustainability Standards Panel Discussion Lunch Event. The presentation and panel discussion covered local and global perspectives on Sustainability Standards and provided an update on the IESBA’s Firm Culture and Governance project.

Big 6 Firms Sustainability Meeting

On 19 February 2025, APESB hosted a meeting in Melbourne with the Big Six firms on Sustainability. Mr Mark Babington provided an overview of the Sustainability developments in the UK. AASB Chair Dr Keith Kendall and AUASB Chair Mr Doug Niven discussed the Australian Sustainability Reporting Standards and Australian Sustainability Assurance Standards, respectively.

Both Mr Channa Wijesinghe and Mr Mark Babington presented an update on the IESBA developments and revisions of its global ethics sustainability standards (IESSA). Mr Wijesinghe also provided a high-level overview of the APESB’s exposure drafts on the Australian Ethics Standards for Sustainability Assurance (AESSA). The meeting also allowed the firms to discuss adoption and implementation issues for Australian firms.

IESBA/UK FRC Regulatory Developments Meeting

On 24 February 2025, Mr Channa Wijesinghe and Mr Mark Babington attended a Regulatory Developments Meeting for the Big 6 firms in Sydney hosted by KPMG. The meeting covered recent regulatory and standards developments from the IESBA and UK FRC, including Sustainability reporting, Using the Work of an External Expert, UK audit quality and financial reporting developments.