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New, independent IESBA chairman Jörgen Holmquist believes tackling the thornier issues and raising the whole profile of ethics are key to fully restoring the profession’s reputation

This article was first published in the February 2013 UK edition of Accounting and Business magazine.

The years since the financial crisis first hit have been difficult for many finance professionals, not least because many feel their reputation has been tarred with the same brush used to beat bankers around the head. As a result, the ethical approach of finance professionals has taken on a new level of significance. Ironically enough, accountants have for years had an international ethical rulebook in the form of the code of ethics issued by IESBA – the International Ethics Standards Board for Accountants. The problem, perhaps, is that not enough people are aware of this fact, but if Jörgen Holmquist has anything to do with it, that will not be the case for long.

In September 2012 the International Federation of Accountants (IFAC) brought off something of a coup when it appointed the former director general of internal markets and services at the European Commission as the first independent chairman of IESBA.

Holmquist’s term as director general spanned the financial crisis and he managed the European Commission’s regulatory response. He represented the Commission on the Financial Stability Board and oversaw the legislation developed to address the crisis, from bank capital requirements to the work of credit ratings agencies. In 2009, he was named by the Financial Times as one of the 30 people in Brussels with the most influence on EU policy and legislation.

For IFAC and its members, Holmquist’s appointment was an important step in publicly demonstrating its commitment to an impartial and robust ethical code. ‘I’m not an accountant by background but have spent a lot of my career working with accountants and auditors,’ says Holmquist from his office in Brussels. ‘The idea of an independent chair is a fairly recent but important one. It was clear that the regulatory community had concerns that the chair should clearly represent, and also be perceived as representing, the public interest.’

An accountancy qualification, in other words, was a handicap. ‘The way that “independent” is defined meant that the chair could be an accountant,’ agrees Holmquist, ‘but there was an expectation that he or she should not be someone from the accountancy profession. Since I am not an accountant I am very committed to listening to and fully understanding the views and concerns of the profession.’

When the call came, Holmquist did not hesitate. ‘I liked the idea. Accountants and auditors have a strong role in the public interest, and that makes ethics very important.’

It’s also clear that there is little he likes more than finding a consensus. ‘I enjoy sitting with colleagues trying to solve a problem,’ he says. ‘There’s something about working with people with similar backgrounds but from very different countries – it has made me very optimistic about our ability to find solutions among different cultures.’

Officially, a key part of his role is to ‘enable, encourage and promote a deeper understanding by stakeholders and the public of the strategies and activities of IESBA’. It is a big ask because, frankly, IESBA is hardly a name on everyone’s lips, even within the profession. But Holmquist isn’t fazed. ‘In any activity, you always feel there’s not enough interest in what you do,’ he says, adding that he is realistic about what can be achieved. ‘Outside of the profession, IESBA is not particularly well known and we have to be realistic about that. But my ambition is that we will become well known, and in a good way.’

Not alone

Within the profession, though, he says it is vital that accountants know they are not alone when facing difficult ethical issues. As far as the general public is concerned, the issue is more about restoring trust. In a sense, the financial crisis has helped by raising the public profile of ethical behaviour and its role in business.

‘There is certainly a lot of interest in accounting and auditing at the moment, and particularly in whether accountants are living up to the standards expected of them,’ Holmquist says. ‘Living standards have gone down in many places, insecurity has increased and people are upset by what they see as unreasonable pay levels in the banking industry and elsewhere. And then there are more recent discussions, like the tax paid by corporations such as Starbucks in the UK. These are issues that touch on values, ethics and morality and they have become far more important.’

The profession may not have attracted as much criticism as banks and credit rating agencies, but it has had its share of scandals and is certainly viewed more critically than it was five years ago. ‘I firmly believe that if we work on the important issues and come up with credible, reasonable solutions, the press around the profession will improve,’ says Holmquist. ‘People will see that the profession is covered by ethical and other standards that are of good quality. But it won’t happen overnight.’

Restoring trust takes time and he knows there are no short-cuts, only hard work. ‘We need to listen to stakeholders and take their views into account,’ he says, ‘so they know that even if we come to a different conclusion, we have taken their concerns seriously. That’s the basis for a good reputation.’

IESBA’s current workplan concentrates on amending the existing code in key areas. There are some thorny issues, particularly in developing proposals to apply across multiple jurisdictions. In August 2012 IESBA proposed in an exposure draft that accountants, whether in business or practice, should be responsible in some circumstances for disclosing suspected illegal acts carried out by their clients or employers.

The response has been largely negative. Some argue it is the job of national regulators to say when an accountant can break their contractual duty of confidentiality. Others believe it inappropriate to force accountants to breach confidentiality. And there have been warnings that the proposals could discourage the next generation from entering the profession.


Holmquist says: ‘Many people feel we need a robust system to deal with illegal acts, but there are problems around liability and the consequences for accountants who blow the whistle. We’ll go through the responses carefully, evaluate what everyone says and have a thorough discussion. It’s about what’s reasonable to ask of accountants and auditors within their role in the public interest.’ He realises that IESBA’s final recommendations will be widely judged: ‘It will be a big litmus test for us.’

Also on the agenda are the thorny issues of audit firm rotation and the provision of non-assurance services to audit clients. This is where things become political for IESBA, as it has found itself confined to a ‘wait-and-watch’ role while the European Commission and the US come up with their own proposals.

It’s clear that Holmquist is not particularly comfortable with IESBA following rather than leading here. ‘My view is that IESBA should be identifying emerging issues as early as possible. It’s much more difficult for us when a political institution like the EC starts working on an issue like audit firm rotation because, by the nature of it, we cannot be in the lead and we can only contribute. If we are early on to the stage, we can play a leading role – that’s my aim.’

His term of office will be three years and four months, and achieving everything he has planned for IESBA during that time will take hard work. ‘By the time my term is up I’d like us to be equally well trusted by regulators, the profession and investors. I’d like us to have a higher profile and be better known, and to have contributed to the sense of ethics and principles being taken seriously.’

It will also take a lot of travel. When we spoke he was about to head off to Beijing and Tokyo for most of January. ‘The travelling is fun, but a bit too much at the moment,’ he says. ‘What’s good is that outside of the regular meetings I can work wherever and whenever I like – I could be in Sweden or with friends in the south of France. IESBA meetings are normally held in New York, which I love, but perhaps eight to 10 times a year is a bit more than I need. Rather that, though, than no travelling at all!’

The CV

September 2012
Appointed IESBA’s first independent chairman.

Joined IESBA as a board member.

2010 to date
Fellow, Weatherhead Center, Harvard University.

Director general of internal markets and services, European Commission.

Director general of fisheries and maritime affairs, European Commission.

Director general of fisheries, European Commission.

Deputy director general of budget, European Commission.

Director, directorate general of agriculture, European Commission.

Swedish ministry of finance, various positions including budget director (1993–97).

The code

The current IESBA code of ethics requires accountants to adhere to five fundamental principles:

  • Integrity. A professional accountant should be straightforward and honest in all professional business relationships.
  • Objectivity. A professional accountant should not allow bias, conflict of interest or undue influence of others to override professional or business judgments.
  • Professional competence and due care. A professional accountant has a duty to maintain professional knowledge and skill at the level required to ensure that clients/employers receive competent professional services based on current developments, legislation and techniques, and should act diligently and in accordance with applicable technical and professional standards when providing professional services.
  • Confidentiality. A professional accountant should respect the confidentiality of information acquired as a result of professional and business relationships and should not disclose any such information to third parties without proper and specific authority, unless there is a legal or professional right or duty to disclose. Confidential information acquired as a result of professional and business relationships should not be used for the personal advantage of the professional accountant or third parties.
  • Professional behaviour. A professional accountant should comply with relevant laws and regulations and should avoid any action that discredits the profession.

The basics


The International Ethics Standards Board for Accountants (IESBA) is an independent body set up under the auspices of IFAC to develop and issue, in the public interest, high-quality ethical standards and other pronouncements for professional accountants worldwide.

IESBA is overseen by the Public Interest Oversight Board (PIOB).

IESBA’s code of ethics for professional accountants is a principles-based standard used by IFAC and its member bodies, which include ACCA. IESBA also issues other pronouncements on issues relating to ethics.

It has a part-time chairman and 17 volunteer members, both practitioners and non-practitioners. Members are appointed by the IFAC board, based on recommendations from the IFAC nominating committee, and approved by PIOB.

Liz Fisher, journalist

Last updated: 16 Jun 2014