ACCA response to the Public Interest Oversight Board's invitation to comment on the 2017-2019 PIOB Strategy.
ACCA is an organisation that is committed to the public interest. Accordingly, we are supportive of the PIOB and its work, and are pleased to have the opportunity to comment on the 2017-2019 strategy.
We agree with the goal to ensure that standards are set that serve the public interest by representing all stakeholders in a balanced manner, free from undue influence of any dominant stakeholder.
The public interest is served by there being high quality accountants receiving high quality education and training, regulated by high quality ethical standards and, in the case of auditors, following high quality auditing standards. It is also in the public interest for the public to have confidence in the standard-setting boards’ standards, where such confidence is justified. As such, what matters in standard-setting is the outcome of the standard-setting process. To the extent that it doesn’t unduly undermine confidence, the process by which standards are developed is less important.
We believe it is essential for there to be an oversight process that ensures that the SSBs’ standards are of high quality and reflect the public interest. In places, the strategy could be enhanced by articulating how the PIOB’s proposed interventions will improve outcomes. The PIOB’s role is a difficult one: it is important to intervene when required by public interest concerns, but the benefit of intervening should be measured against its cost, namely the reduction in public confidence that it may bring.
At times in the consultation, we identified some proposals where it was not clear how the proposed intervention would improve outcomes in the public interest. We believe that the PIOB should seek to explain how the public interest would be served by these changes to demonstrate more transparently how it is fulfilling its mandate:
Without an articulation of how these proposals will enhance the public interest, it is difficult to assess how the public interest is being served and whether there may be unforeseen consequences.
It would also be helpful for a clearer explanation of the PIOB’s strategy for working together with the SSBs to develop global standards that reflect the public interest and are fit for purpose. With PIOB’s goal being ‘to ensure the public interest responsiveness of the standards developed under its oversight’, this explanation could set out the PIOB’s presumptions about the nature of the public interest, the objectives of the SSBs, the intentions of stakeholders in the financial reporting process, including professional accountants, and the outcomes that will best serve the public interest.