In November 2010, the International Federation of Accountants (IFAC) published a consultation paper setting out its perspective of the public interest. According to IFAC, “A hallmark of the accountancy profession is its obligation to act in the public interest. But, it is not always apparent what this means and how accountants can determine whether they are meeting this expectation. IFAC, by developing this position paper, is seeking to advance its understanding of this important issue.”
IFAC defines the “public interest” as the net benefits derived for, and procedural rigor employed on behalf of, all society in relation to any action, decision or policy. This practical definition of the public interest enables one to assess the extent to which actions, decisions or policies are made in the public interest.
IFAC considers that the “public” is inclusive of all individuals and groups because the responsibilities of the accountancy profession affect (directly or indirectly) every aspect of society: investors, consumers, suppliers, citizens and taxpayers, as well as those seeking sustainable living standards and environmental quality, for themselves and future generations. The extent to which any particular group is impacted can vary according to the action, decision or policy taken.
The paper was developed in the context of IFAC’s mission, to enable IFAC to assess the extent to which its actions and decisions are made in the public interest. IFAC is of the view that the benefits for society noted in the public interest definition may include the soundness of financial and non-financial reporting, the comparability of financial and non-financial information across borders, fiscal prudence in public expenditures, and the contributions that accountants make to corporate governance, efficient resource management and organizational performance.
For an overview of IFAC’s work, see A Definition of the Public Interest: At a Glance. Also, review the related materials: A Definition of the Public Interest: Policy Position Paper #5 and Appendices referred to in the paper which was published in June 2012. In addition, consider the guidance issued by the Institute of Chartered Accountants in England and Wales (ICAEW) in the paper Acting in the public interest: a framework for analysis.
