INTHEBLACK April 2026 - Magazine - Page 40
F E AT U R E
adhere to five fundamental principles: integrity,
objectivity, professional competence and due care,
confidentiality and professional behaviour. It is
based on The International Ethics Standards Board
for Accountants’ standards and includes Australian
definitions, which apply to all Australian members
whether in business or public practice. At the ethical
juncture that professions face with AI, there is a
tipping point between prescriptive and principled
standards and codes. Prescriptive rules can place
too much emphasis on the detail, while principled
standards can lack clarity and certainty.
Also at the roundtable, CPA Australia regulation
and professional standards lead Belinda Zohrab
noted that the pendulum has swung toward more
extensive, prescriptive settings.
“High-level, principle-based standards can be
applied to a variety of circumstances and have
longevity, but principles may create ambiguity
and confusion,” she said. “We have come from
something aspirational that can be moulded and
applied positively and negatively to something which
is many pages and is quite prescriptive.
“Sometimes that provides clarity and a useful argument
between black and white, but it is a lot to handle.”
Another consideration is the equilibrium between
rewarding accountants who follow the rules and
penalising those who do not.
“We go through periods where the principle-based
approach seems to work well,” commented
40 INTHEBLACK APRIL 2026 SPECIAL EDITION
Wayne Stokes FCPA, non-executive director
at Port Authority of New South Wales and chair
of CPA Australia’s Ethics and Professional Standards
Centre of Excellence. “Then, a scenario happens,
such as the issues examined by the Financial Services
Royal Commission, where all of a sudden the ‘stick’
needs to have a place. Therefore, you need both
the carrot [reward] and stick [penalty].
“It is like a seesaw. Sometimes the swing between
the carrot and the stick is balanced, and at other
times it seems top-heavy, with not enough weight
on one side.”
The inherent scope principle-based ethical codes
may be an advantage as the accounting profession
works through parameters around AI. “Principle-based
thinking is beneficial because we do not know what
is going to happen in the future, but we do have a
set of principles we can apply,” said D’Cruz.
Whether the existing regulations and conduct codes
are adequate for the coming AI revolution is unclear,
but it will be incumbent upon professionals to keep
abreast of any changes and adapt to them.
“Regulation is a continuous learning journey
for professionals,” said Marsha Ma CPA, financial
controller at Australian Energy Market Commission
and a member of CPA Australia’s NSW divisional
council. “It is essential, particularly given the growing
complexity of modern businesses.”
CULTURE IS KEY
While industry guardrails provide structure, it is
a culture of open communication within
