Accountants baulk at revealing being investigated to clients
The major accounting bodies have baulked at proposals which would require accountants and tax financial advisers to inform clients that they are under investigation by the Tax Practitioners Board.
The Joint Bodies have declared that an investigation is just an investigation and may result in no adverse finding against their members.
Providing feedback to Treasury on the proposed changes to the Tax Practitioners Board Code of Professional Conduct, the Joint Bodies which include the Financial Advice Association of Australia expressed concern at the new approach, particular the need to inform clients of a current or former investigation.
“The Joint Bodies are of the view that serious consideration should be given to any obligation that requires tax practitioners to disclose current investigations,” the response said. “An investigation is merely that: an investigation (not yet a finding).”
“The investigation may have been initiated in response to information which later proves to be incorrect, inaccurate, or otherwise unsubstantiated. For such details to be made known to clients, in addition to potential reputational damage for the tax practitioner, it is possible that this information being placed in the public domain could prejudice future disciplinary proceedings to be taken by the TPB.”
“Premature disclosure of this information could be a denial of procedural fairness to tax practitioners and is not in the public interest.
“This proposed obligation may result in a client not engaging the tax practitioner (impacting income earning potential) and/or reputational damage which could be of lasting effect. There would be clear detrimental outcomes for the tax practitioner if the investigation ultimately finds no breach of the Code. It would be more equitable to require disclosure only after the TPB has made a final decision.”
The Joint Bodies have also argued against retrospectivity contained in the changed approach.
I’m not an accountant but I can say this is a complete joke. It’s the same in the advice profession. The big insto’s are light years ahead in malfeasance but the regulatory response is to blame the little ppl and cover them in over regulation.
I get that being a professional has higher responsibility than just being an employee but this move is massive overkill and patently unfair, especially to smaller practitioners.
We may as well have sentencing in the courts before the jury hears the evidence.
It applies to Advisers too under Tax Financial Advice.
CANBERRA POLLIES AND REGULATORS ARE WORLD RECORD USELESS, COSTLY RED TAPE PRODUCERS.
This is really a bad idea. I’m not much of a friend of accountants, but this is unacceptable. A joke.
How on Earth did this proposal even see the light of day? Who in their right mind thinks it is ok to destroy someone’s reputation/career/business before an investigation has been completed?
Australia, the land of the red tape.
Is there any recent analysis on cost of red tape/ over-regulation vs the loss of productivity & investment?