After spending three decades helping to internationalize the accounting profession in Australia and New Zealand, Lee White takes on a truly global role as Executive Director of the IFRS Foundation, the oversight body of the International Accounting Standards Board. A Plus interviews him as he prepares for the challenge.
As Lee White landed at London’s Heathrow Airport this month, the headlines about the accounting profession were grim, swirling around him as bitterly as the British capital’s infamously changeable spring weather.
“Partners fired over leak of audit regulator’s confidential plan,” said The Wall Street Journal. “U.K. watchdog to scrutinize quality of hires at top auditors,” said the Reuters. “Watchdog considers break-up of auditors as scandals multiply,” said Business Day, a South African paper.
Any accountant would be discouraged by such news, but White is an irrepressible optimist, an auditor and long-time professional accounting body administrator, who is taking on his biggest global challenge.
As the Australian veteran assumes office as Executive Director of the IFRS Foundation – the non-profit organization that develops and promotes International Financial Reporting Standards (IFRS) through the International Accounting Standards Board (IASB) – he welcomes the scrutiny.
Putting accounting under the spotlight, by regulators, investors, and the public, he believes, is a necessary development. “Trust in many different forms is being measured and tested at different points around the globe,” he says.
The world of business is also being tested, he adds, “and the accounting profession comes into that. Politicians, media, business, universities and so forth, are all being challenged about their ability to maintain the trust of the broader society.”
The Financial Reporting Council, which regulates the profession in the United Kingdom, has promised a new approach to monitoring the performance and stability of audit firms. It said it was on the alert for systemic deficiencies among the six largest firms – PwC, Deloitte, KPMG, EY, BDO and Grant Thornton – following what the Financial Times called “a series of eye-catching company failures.”
To White, accountants, like professional sportspeople, have a privileged role in the community. “Trust comes from behaviour, ethics and fundamental expectations,” he says. “They will, at times, get tested and the profession needs to remain vigilant.”
Accountants without borders
As Executive Director, White is in charge of the organization’s day-to-day operations, succeeding Yael Almog, who departed from the role in 2017 after more than five years in the job. “I feel absolutely privileged to serve in this post,” says White.
While the IFRS Foundation is the principal guardian of global standards, White says the individual national and territory bodies – such as the Hong Kong Institute of CPAs – are vital to upholding the profession’s reputation.
“There has been a lot of national-level work occurring in different ways in terms of global alignment,” he says. “Progress has been outstanding and has brought a huge level of consistency and comparability.”
White should know: from 2013 to 2017, he was the inaugural chief executive officer of Chartered Accountants Australia and New Zealand (CAANZ), the world’s first cross-border accounting institute, an organization he helped to create through the merger of the Institute of Chartered Accountants Australia, of which he was CEO from 2011 until the merger, and the New Zealand Institute of Chartered Accountants.
In creating CAANZ, Lee says two challenges, among many, stood out as the biggest: “attracting and retaining great talent to deliver to our members; and continuing to provide valuable and relevant services to members through significant change.”
He adds, “when I look back about how that progressed, it was a unique transaction, seeing how it would fit in the global structure and how to celebrate both organizations’ 100-plus-year history and create something new.”
National professional bodies, he adds, are there to assist their members not only to remain relevant within their local identity, but also to bring the understanding of the implications that are occurring in business at a global level, and digest it at the local level.”
However, White points out that it is not a one-way information flow. Institutes, he says, “can also bring local changes into a national and international arena, to facilitate understanding of how to change things at an international level.”
He cites knowledge of blockchain – a secure method for recording online transactions – filtered up from individual members into the accounting bodies. “We had members talking about blockchain five years ago and they wanted their professional body to help them understand the implications for business,” White recalls.
Globalization is also changing professional accounting bodies, especially where members are from highly mobile populations, such as in Australia, New Zealand and Hong Kong.
“Members are moving around geographically at rapid rates, and the profession has to service those members no matter where they’re based. This is the new nature of the profession’s services and engagements. Professional bodies have a wonderful a role to play but it’s an evolving one.”
Raising the standards
One of the highlights of White’s 30-plus years’ experience in both the private sector and public authorities in Australia was the decision to adopt IFRS from 1 January 2005 after a decade-long convergence process.
“If you go back to the key goals identified at the time of adoption, it would be about a much better sense of comparability, post-IFRS adoption, of financial reports of Australian entities. They became more relevant to investors and stakeholders, and created greater opportunity for capital inflows into Australia.”
In 2016, a joint report by the FRC and the Australian Accounting Standards Board suggested local accounting under IFRS had a positive impact on the Australian economy.
This conclusion gratified White, who between 2004 and 2009 worked as chief accountant at the Australian Securities and Investments Commission (ASIC), the country’s main corporate regulator, where he provided oversight and supported Australian companies in their transition to IFRS.
“The relevance [of IFRS] was very important,” he recalls. “There was a greater sense of engagement, that you are part of a much bigger picture rather than just explaining what our picture is. You get the sense that many users of Australian company accounts, post IFRS, just find it easier in their engagement with the investor community.”
Prior to joining ASIC, he served as assistant auditor-general of the Audit Office of New South Wales from 1994 to 2004. Earlier, he worked for Coopers & Lybrand (now PwC) after he graduated from Macquarie University in Sydney.
White expects to draw on all these experiences in his role at the IFRS Foundation. “While there will be unique challenges coming in a different form for me, I believe my earlier career has equipped me to engage at an international level,” he says. “I see with my move that it will be very important for me to create a presence with new stakeholders that is seen as a true internationalist rather than as an Australian working in a global role.”
Clever balancing act
White is, after all, no stranger to the global stage. While a representative on the Australian Financial Reporting Council, he was also the Australian member of both the International Organization of Securities Commissions and the International Forum of Independent Audit Regulators.
He follows in the footsteps of a number of Australian accountants who have strode the international forums, and counts as advisors: Michael Sharpe, a former chairman of the International Accounting Standards Committee, and Warren McGregor, a member of the inaugural IASB, Kevin Stevenson, former director of technical activities at the IASB, and Ian Mackintosh, former vice-chairman of IASB.
White says a strong business community has helped give Australia an important role in global accounting, as well as its membership in the G20 group of large economies. But diversity, he adds, is equally important. “Australia has benefited from an inflow of talent, including from Hong Kong, and different perspectives, all adding to inclusiveness and sharing skills.”
White believes that the profession can stand up to the most taxing challenges and rejects any notion that auditors are resistant to change. “I can identify many examples where we have been right at the forefront,” he says. “Look at the way our global profession looks at technology – adoption is very strong and positive.”
He cites the way the profession has quickly established itself as a trusted advisor to emerging technologies and new-economy companies such as Uber and Airbnb. “In our profession, I think we have a wonderful desire to be inquiring of new technologies, and we need to continue to do that.”
Relevance, he says, is key. “As professional accountants delivering services, we need to remain relevant. Members need to remain relevant to their clients and the professional body needs to remain relevant to the members. It’s not just technology – changes outside technology include demographics and ethics, and they play an important part.”
White also believes in maintaining a work-life balance. In his case, it’s balancing on two wheels as he continues to pursue his love of motorcycle speedway racing. “It has important role in my life,” he says with a laugh. “One great aspect is mentoring some of the younger riders as they move into professional careers.”
That, he says, has echoes in his professional life. “People in this job put a lot of pressure on themselves, they are high performing and high achieving. I understand that, but they have to understand that their careers are there for a long time.
Balance, he adds, is an important way to ensure talent stays within the profession. “I think we need to bring a diversity of cultures into teams at a much quicker rate than what we previously had. We need to be quicker in acknowledging younger talent – men and women – at a much quicker rate.”
This article was originally published in the April 2018 issue of A Plus. You can also read the digital version.