IFAC Adds Sustainability Reporting to Accountant Training

Taking a crucial step toward increasing sustainability expertise among accountants, the International Federation of Accountants (IFAC) has issued updates to its International Education Standards (IES). The revision incorporates sustainability abilities into professional accountants' initial training programs, as the increasing focus on sustainability-related financial disclosures is better suited to the modern business landscape.

IFAC is supported by over 180 professional accountancy bodies in more than 135 countries, and has an important impact on the training and education of accountants worldwide. The IES standards issued by the organization are the central framework of accountancy education, setting out main principles and learning outcomes to be included in programs. These standards establish the pre- and post-qualification education requirements, ensuring that accountants possess the essential skills to address changing industry needs.

The rationale for updating the IES standards is necessitated by growing demand for ESG-related disclosures. Sustainability reporting has, over recent years, gained increased momentum as companies, investors, and regulators see the necessity of reporting environmental, social, and governance factors in a transparent manner. This trend has seen the introduction of new global reporting, assurance, and ethical standards, and numerous jurisdictions adopt mandatory sustainability disclosure.

To address such change, IFAC has incorporated sustainability analysis, reporting, and assurance into its competency standards for accountants. The new standards will ensure that future accountants will be equipped with the ability to incorporate both financial and sustainability information, allowing them to present a better view of an organization's total performance. The revision also gives more weight to evaluating the sustainability effects of business models, value chains, and organizational strategies.

A fundamental part of the revision is the addition of a new assurance area of competence. This addition will provide accountants with the capabilities to authenticate and assure information on sustainability, guaranteeing its validity and reliability. With sustainability disclosures becoming a statutory requirement in most parts of the world, being able to issue assurance on such information will be essential in upholding trust and credibility in financial reporting.

Furthermore, IFAC's revised standards enhance critical skills like decision-making, flexibility, and teamwork. These skills are more crucial as accountants grapple with the nuances of sustainability reporting and interact with diverse stakeholders like corporate executives, investors, and regulators. By integrating sustainability ideas across the learning outcomes, IFAC helps accountants properly relate financial and non-financial information, providing a more integrated view of organizational performance.

To aid in the adoption of these changes, IFAC has also published explanatory materials intended to guide professional accountancy organizations, universities, and training programs in adopting the updated standards. These resources are intended to ease the transition, enabling educators and trainers to incorporate sustainability-related competencies into their curricula effectively.

Lee White, IFAC's Chief Executive Officer, underlined the significance of these revisions by noting that IFAC and its members are devoted to enabling professionals with the expertise necessary to provide high-quality sustainability-related financial reports and services. He underscored that the changing environment of sustainability reporting necessitates accountants' adaptation and learning new skills, so they are not left behind in an industry that is evolving at a high pace.

The reissue of the IES standards is aligned with global wider initiatives to deepen sustainability reporting and accountability. Regulators, governments, and profession associations are, on a heightened basis, necessitating increased openness of corporate sustainability performance, mindful of its impact on financial health, investment options, and sustainability of businesses for the long run. By adding sustainability competence in accountancy programs, IFAC is taking charge in equipping future professionals for addressing these escalated demands.

With increasing development of sustainability reporting, accountants will be at the forefront in defining the future of corporate disclosures. Through increased training and education, they will be in a better place to offer useful insights, aid sustainable business operations, and aid the global shift towards a more responsible and transparent financial sector.