Privacy laws undermine accountants’ disciplinary regime

Privacy legislation has been identified as an impediment to readily identifying bad apples in the accounting profession, according to evidence given to a Parliamentary Committee.

Answering questions during a hearing of the Parliamentary Joint Committee on Corporations and Financial Services, representatives of the major accounting groups acknowledged that their ability to share information on members was limited by the nature of Privacy legislation.

Among the issues raised by members of the committee was whether dual memberships of the major accounting bodies – CPA Australia and Chartered Accountants Australia and New Zealand (CAANZ) could be “gamed’ by miscreant accountants.

The chair of the committee, NSW Labor Senator, Deborah O’Neill, asked how many accountants employed by the major accounting firms have dual membership.

“So, you have 357 at PWC, 405 at KPMG, 341 at EY 399 at Deloitte, 160 at BDO and 83 at Grant Thornton, how many of those individuals associated with you, using CPA Australia insignia to assert their professional capacity, how many of those are also have a joint association with CA-ANZ, she asked.

CPA Australia chief of policy, Elinor Kasapidis said that the organisation would not know because the accountants were coming to CPA Australia as a professional submission.

She said that if the person came with a letter of introduction of CA-ANZ and then later ended that membership, CPA Australia wouldn’t know because of the Privacy Act.

“So, we wouldn’t know who holds dual membership,” Kasapidis said.

O’Neill then asked whether the situation could be “gamed” and urged the CPA Australia representatives to consider the most ‘creative’ way this could be achieved.

She said that she was concerned that notwithstanding the efforts of the major accounting groups, “the dodgiest people would try to ‘game’ this structure”.

Appearing before the committee, Australian Securities and Investments Commission (ASIC) Commissioner, Kate O’Rourke suggested it might, in consultation with the accounting bodies, test the breadth of the privacy laws.