From 1 January 2026, the amending standard to the Accounting Professional and Ethical Standards Board (APESB) 110 Code of Ethics for Professional Accountants (including Independence Standards) comes into effect to facilitate improved sustainability reporting and assurance in Australia.

It is a detailed code. The original standard runs to more than 300 pages and the amendments almost double that, bringing in new terminologies and ethical guidelines to ensure that people reading sustainability-related corporate disclosures can be confident they comply with regulations for climate and sustainability reporting.

The code comes into force partly to address the issue of greenwashing. The Australian Competition and Consumer Commission (ACCC) conducted a sweep of 247 businesses across eight sectors in 2022, and found “vague and unqualified claims, a lack of substantiating information”, exaggerated benefits and the omission of relevant information.

The Sustainable Agency listed 20 examples of global greenwashing in a 2025 report and cited the example of Australian superannuation fund Active Super, which was called out by regulator Australian Securities & Investments Commission (ASIC) in 2024 and found guilty of making false claims. The super fund said it would stop investing in harmful options, such as tobacco manufacturing, oil tar sands, gambling and Russia-based investment because of the Ukrainian invasion, but these claims were found to be untrue.

Amir Ghandar FCA, CA ANZ assurance and reporting leader, says that auditors and assurance practitioners understand that the profession needs “strong and respected, trusted ethical frameworks”.

“Accountants will need to adopt these ethical principles into the core of everything they do as auditors or preparers of sustainability reports,” he says. “I think the first challenge will come in the transition, and making sure that the timing of adopting new laws and reporting requirements – along with auditing and ethical requirements – all line up.”

A network of expertise

Kristen Wydell, CA ANZ general manager professional standards, points out the code of ethics has been amended to include other specialists who may be providing sustainability assurance services, including engineers, scientists and legal professionals.

“Including other occupations in the code was in response to regulatory requests,” says Wydell. “There was a desire for sustainability assurance to have the same rigour as financial statement assurance.”

Experts from other occupations are not required to sign up to the code, but they can choose to apply it. This is likely to differ across jurisdictions because some regulators will require the code to be used by the person who did the work and it may not necessarily be an accountant.

In countries other than Australia, a non-accountant can sign the sustainability assurance report but in Australia it must be a registered company auditor.

On the use of external experts, the revised code says that while auditors can consult expert opinions, they must use their own professional judgement to ensure they use any expert advice in compliance with the overarching principles of integrity, objectivity, professional competence and behaviour, and confidentiality.

To comply, CAs may require additional information from their expert sources. This might involve checking the expert’s qualifications or prior experience, while auditors could also request experts to complete questionnaires to assess their objectivity.

Professional scepticism is essential

There are also enhanced ethical and independence requirements contained in a new section on sustainability assurance (including independent standards), which provides clearer guidance on professional behaviour for individual accountants, but which are also crucial for firms performing assurance engagements.

Amendments specifically refer to sustainability engagements and existing sections of the code have been expanded to include examples relevant to sustainability reporting and assurance.

Auditors are asked to ethically respond to claims made by corporates about their sustainability performance, applying objectivity and professional scepticism, and drawing attention to the role of questioning overly vague statements and buzzwords such as ‘eco-friendly’, by seeking specific data and by querying unsubstantiated claims.

“As far as enforceability, CA ANZ oversees our members’ professional conduct and ASIC has jurisdiction [in Australia] when it comes to corporate reporting,” says Ghandar. “In late 2025, ASIC issued findings around the independence of auditors and these also apply when it comes to sustainability assurance.”

More changes to come

Preparers and assurance providers for sustainability-related information have only had a relatively short period of time to implement new standards. While there will be some adjustment, Ghandar believes the profession is well equipped for the changes and for the added responsibility.

“Australia is way ahead of the pack internationally, so it is challenging that a lot of the things which practitioners will be required to do are being done for the first time,” he says.

The January 2026 changes to the code will be followed with more changes in 2028, relating to the value chain comprising an entity’s suppliers.

“In an audit situation, independence considerations are significant and these further changes will mean that auditors will have to satisfy themselves as to the independence of auditors who have worked for entities through the value chain,” says Ghandar.

For guidance, visit the CA ANZ Sustainability Resource Centre.