The newly published sequel to the 2017 G20 public trust in tax report from ACCA (the Association of Chartered Certified Accountants), CA ANZ and IFAC (the International Federation of Accountants) reveals a high level of distrust among the public in politicians and non-government organisations (NGOs) when it comes to tax systems.

The new report also shows that public trust in professionals, such as accountants and lawyers, remains high by comparison.

When it comes to evaluating their tax systems, respondents across G20 nations are most concerned about transparency, complexity, inequality and corruption in tax systems.

Respondents’ concerns about inequality stem from the perception in English-speaking countries that high income earners and multinationals are treated better by tax systems than average or low income earners. Respondents in China, Indonesia and India had high levels of trust in tax authorities, politicians and accountants, reported efficient tax filing, and supported tax competition to attract multinational business.

G20 public trust in tax report is based on an online survey of more than 8,400 members of the general public across G20 countries and New Zealand, revealing that respondents have:

• a trust deficit amongst politicians and the media; 58 per cent of respondents expressed distrust or strong distrust in politicians, down nine per cent since 2017. Similarly, distrust in the media stands at 37 per cent down four per cent since the last survey;

• the highest level of trust in professional tax accountants at 55 per cent, down a marginal two percentage points compared to 2017, and professional tax lawyers at 50 per cent, up one per cent;

• consistent levels of mistrust year-on-year in non-government organisations at 37 per cent, an increase of two percent compared to 2017;

• divided views of trust in government tax authorities, with 37 per cent saying they trust or highly trust tax authorities and 34 per cent distrusting or highly distrusting them.

Commenting on the second year’s findings, Chas Roy-Chowdhury, global head of tax at ACCA says: ‘Once trust is lost, it’s hard to regain. Tax is a complex issue and one that touches all our lives - so that trust is important. What’s clear from this research is the need for all significant players – from politicians to tax experts - to work together to build and sustain the public’s trust in tax. And while the accountancy profession fares the best again in this year’s results, we cannot be complacent about these findings.’

Kevin Dancey, IFAC CEO adds: ‘Given that accountants adhere to a strong ethical code that supports their public interest obligations, it’s vital that we actually understand what the public thinks of tax systems and who they go to for trusted advice. This research gives everyone working in tax, including policy makers, politicians, media and accountants, a powerful insight in what the public really think. By understanding their views, professionals can better work to inspire confidence in the system as a whole.’

Michael Croker from CA ANZ concludes: ‘Our research shows that people say they broadly trust and want to hear more from experts and professionals, but scepticism in politicians and the media continues. If transparency is one of the pillars of an effective tax system, then the professionals and experts working in tax need to strive for even more clarity on how tax works nationally and globally. It’s clear there is still much work to be done to sustain this hard earned trust it amongst the tax-paying public.’

About IFAC
IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of over 175 members and associates in more than 130 countries and jurisdictions, representing almost 3 million accountants in public practice, education, government service, industry, and commerce.

About ACCA
ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants, offering business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.

ACCA supports its 208,000 members and 503,000 students in 179 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 104 offices and centres and more than 7,300 Approved Employers worldwide, who provide high standards of employee learning and development. Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence.

ACCA has introduced major innovations to its flagship qualification to ensure its members and future members continue to be the most valued, up to date and sought-after accountancy professionals globally.

Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. More information is here: www.accaglobal.com

About CA ANZ
Chartered Accountants Australia and New Zealand is a professional body comprised of more than 117,000 members living and working around the world. We focus on the education and lifelong learning of our members, and engage in advocacy and thought leadership in areas of public interest that impact the economy and domestic and international markets.

Citizens across G20 countries are concerned about transparency, complexity and inequity in tax systems. However, they are also aware of the international tax landscape and understand the need for trade-offs in tax policy. In tackling these issues, people say they trust and want to hear more from experts and professionals, but have grown skeptical of politicians and the media.

Professional accountants have a meaningful opportunity to enable more effective Enterprise Risk Management (ERM) within their organizations, according to a report published today by IFAC (the International Federation of Accountants).

Businesses face rapid change and increasing uncertainty driven by a myriad of factors, including geopolitical events, volatile financial markets, technology developments, cybersecurity, data privacy concerns, and climate change. According to the report, professional accountants can play an amplified role within their organizations to identify, measure and mitigate emerging risks through robust ERM practices.

The report underscores the reality that risk management remains underdeveloped in many organizations. A survey of mainly US-based organizations, conducted by North Carolina State University and the American Institute of CPAs, found that less than 20% of organizations view their risk process as being integrated with strategy and objectives, and 69% of organizations do not have a comprehensive ERM process in place.

To drive more effective ERM, management must draw upon the Chief Financial Officer and finance function to ensure risk management practices provide a holistic understanding of opportunity and risk linked to objectives and value creation.

“This is a particularly uncertain time for businesses as the global economy experiences heightened volatility and rapid change. In this environment, proper risk management will be increasingly important for organizations to ensure their resiliency and success over the long term,” said Kevin Dancey, IFAC CEO. “Professional accountants are well positioned to better serve the organizations they work for by enabling effective enterprise risk management that identifies both risks and opportunities for the business.”

CFOs and accountants with clear risk management responsibilities are in a better position to make individually and functionally greater contributions to risk management. The report identifies three ways in which CFOs and finance functions can enhance their contribution to ERM:

• Align risk management with value creation and preservation;
• Drive insights and enable decisions through provision of risk modeling and analytics, data governance and identification of organizational risk appetite; and
• Enable integration and interconnectivity by breaking down siloes across the organization to share information.

Enabling effective ERM will require accountants to employ various competencies, including strong leadership and interpersonal skills, and to commit to lifelong learning on risk management and emerging risk issues. In the coming decades, it will be critical to better integrate risk management into professional education and training for accountants, and to improve the relevance and quality of Continuing Professional Development (CPD). 

About IFAC
IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of over 175 members and associates in more than 130 countries and jurisdictions, representing almost 3 million accountants in public practice, education, government service, industry, and commerce.

Every year, IFAC develops a work plan for the Member Body Compliance Program that is consistent with IFAC’s strategy. This work plan is developed with advice and oversight from the Compliance Advisory Panel.

On December 19, 2018, IFAC will host a one-hour webinar on a future model for advancing international accountancy education in the public interest. The webinar will preview planning to date and provide an outline of the model prior to approval and implementation in 2019.

This model is aimed at ensuring the global accountancy profession addresses the challenges stemming from a rapidly changing environment by harnessing a comprehensive and integrated approach.

To include as many interested parties as possible, the webinar will be available at two times (registration required):

• December 19, 2018, 0800 EST
• December 19, 2018, 1800 EST

The transition from the current structure to a future model was announced by IFAC and the International Accounting Education Standards Board in August 2018, followed by the creation of the International Accountancy Education Transition Advisory Group to advise on the model’s development and transition plans.

ISA 315 (Revised) is arguably the single most important ISA as it forms the foundation for an audit. The SMPC supports the IAASB revising the standard and commends the Board on the considerable amount of work that has been undertaken in developing the proposals and modernizing the standard. Nevertheless, the SMPC strongly urges the IAASB to take the necessary time to ensure the final version of the standard can be operationalized for audits of all different sizes and complexities.