Two pioneers of accounting have been inducted into the Australian Accounting Hall of Fame for their considerable achievements and contributions to the field.
Two pioneers of accounting have been inducted into the Australian Accounting Hall of Fame for their considerable achievements and contributions to the field.
A digital presentation in 2022 resulted in the Australian Accounting Hall of Fame’s broadest reach yet. More than 100 guests from academia, government, and industry tuned in to honour the new inductees at the 13th Annual Awards Ceremony of the Australian Accounting Hall of Fame. The Hall of Fame Director, Dr Phill Cobbin, was joined by the directors of the Centre for Accounting and Industry Partnerships, Associate-Professor Brad Potter and professors Stewart Leech and Kevin Stevenson. Brad Potter, as Head of the Department of Accounting, opened and closed the evening.
The late Mr Chesleigh Baragwanath AO and Professor Patricia Dechow were formally inducted into the Australian Accounting Hall of Fame on Wednesday 2 March.
This year’s Colin Ferguson Oration was delivered by Mr Bill Edge, current chair of the Auditing and Assurance Standards Board (AUASB), and a member of both the International Auditing and Assurance Standards Board and Australia’s Financial Reporting Council (which he previously chaired). A former partner at PwC, in 2021 he was inducted into the Australian Accounting Hall of Fame.
The theme of his oration was recent international and Australian developments in sustainability reporting. Observing that traditional financial statements were increasingly containing more non-financial information relating to sustainability, he identified important organisational milestones in the international history of this development, commencing with the Global Reporting Initiative in 1997.
The current position is that the IFRS Foundation now has two boards under its governance: the International Accounting Standards Board (IASB) and the International Sustainability Standards Board. Additionally, the Foundation has created a Technical Readiness Working Group which, although not fully operational, has already produced two prototype standards, dealing respectively with sustainability-related financial disclosures and climate-related disclosures, the latter including specific requirements for 12 nominated industries. While the IASB was starting with climate-related disclosures, its brief could expand to include standards on a wide range of environmental, social and governance topics.
In Europe, following an initiative of the European Commission, the first sustainability-reporting standards are scheduled for release in September 2022. Closer to home, a NZ climate-related disclosure standard is expected late this year.
Turning to Australia, while climate-related measures and disclosures had enormous public-policy implications, it was unusual for such a public-policy issue to be central to standard-setters agendas. Against that background, Australia has no national approach to sustainability reporting, with legislation covering areas such as water reporting, greenhouse emissions, and modern slavery, lacking a common framework.
The AASB, AUASB and FRC jointly released a position statement in November 2021 which outlined a policy of adopting global sustainability developments within the current framework for financial reporting. There was no support at this stage for the creation of a new body that would specialise in sustainability-reporting requirements.
The oration then moved to a brief survey of the opportunities and challenges to stakeholders from inevitable changes in what was termed the “financial-reporting ecosystem”. One challenge was the length and complexity of annual reports and the question of whether sustainability matters would be dealt with in separate or integrated formats. If the latter, it was important that financial information not be squeezed out.
While the market for assurance services was expected to grow, assurance providers faced particular challenge in generating opinions on a wider range of matters. They would need to develop a broader range of skills as well as employing more non-accountants with expertise in areas such as science, agriculture, human relations, law and risk-management. A potential problem was that non-accounting specialists are not subject to the profession’s ethical code.
The university sector would also need to adapt its teaching and research programs, the latter to embrace developing concepts and standards, appropriate metrics and targets, and examining the impact of sustainability disclosures on financial markets, for example, on cost of capital. Adaptations would also be necessary in the public sector and in small- and medium–size firms.
Edge’s concluding comment was that the development of sustainability disclosures could potentially re-invigorate the accounting profession, but this was by no means guaranteed.
Meet the inductees:
Mr Chesleigh (Ches) Antony Baragwanath AO (1935–2021), Victoria’s auditor-general during 1988–99, was honoured for services to the community in the areas of public accountability and financial management and in the development of standards through initiatives such as privatisation and advances in information technology.
Professor Patricia Dechow, currently the Robert R. Dockson Professor of Business Administration & Professor of Accounting at the University of Southern California, was honoured for her important research into earnings quality and reliability, firm valuations and the development of tests indicating the presence of misstatements in financial reports.
The Australian Accounting Hall of Fame acknowledges and thanks our valued sponsors, CPA Australia and Chartered Accountants Australia & New Zealand, whose generous support makes this prestigious event possible. Nominations for the 2023 Australian Accounting Hall of Fame awards will be open on 1 August 2022.