Accountants baulk at single disciplinary body

ANALYSIS

There are significant echoes of the regulatory oversight imposed on the financial advice profession being extended to accountants arising out of the final recommendations of the Parliamentary Committee report into the major accounting firms, not least the possibility of another single disciplinary body.

As well, the committee has recommended that the Government “bring forward legislation to make the term ‘accountant’ a protected term so that only qualified accountants who are members of a professional body can use it”.

In what represents a swipe at the major accounting groups, the final report of the Parliamentary Joint Committee on Corporations and Financial Services recommended that the Government review just how effective the accounting bodies have been in investigating and disciplining members.

Recommendation 26 of the final report states: “The committee recommends that the Australian Government review the professional accounting bodies’ investigatory and disciplinary processes and, if appropriate, establish a single, independent body to perform these functions.

“Such a body should incorporate a positive disclosure standard so that relevant entities would be required to disclose incidents that are flagged to the Australian Securities and Investments Commission and the new integrated Financial Reporting Council.”

Hardly surprisingly, those elements of the final report have generated push-back from the major accounting bodies, with Chartered Accountants ANZ (CA-ANZ) suggesting the recommendation around a single disciplinary body appeared premised on a misguided assumption.

“Recommendation 26, seeking a review by the Australian Government into professional accounting bodies investigatory and disciplinary processes, with a view to potentially establishing a single independent body to perform these functions, is based on an assumption there are no mechanisms in place within accounting bodies to prevent and manage conflicts of interest,” CA-ANZ said.

However, the accounting body reinforced that it is “a private membership body with By-Laws that enable us to hold our members to account, and in some cases expel them from our community,” it said.

“As associations with an approved professional standards scheme and members of the International Federation of Accountants (IFAC), all professional accounting bodies have the same obligations to implement conduct rules and processes.

“We have already provided extensive evidence that shows our conduct and disciplinary framework is entirely independent from Board and management, with the independent Professional Conduct Committee, Disciplinary Tribunal and Appeals Tribunal “comprised of senior Chartered Accountants, lawyers, ethicists and academics.

Our independent conduct team applies the rule of law without fear or favour, and all CA ANZ members are subject to the same conduct rules regardless of where they work.