Should use of the term ‘accountant’ be legally restricted?

First it was the financial planning groups wanting to limit the use of the term “financial adviser” and now accounting groups are suggesting there should be similar legal limits placed on the use of the term “accountant”.

The Institute of Public Accountants (IPA) has specifically made the call in a submission to the Parliamentary Committee inquiry set up in the wake of the controversy surrounding major accounting consultancy, PWC.

The IPA has told the Joint Parliamentary Committee on Corporations and Financial Services that there are thousands of people who can legally call themselves accountants without actually being covered by the major accounting bodies.

“Of major concern to the IPA, are the thousands of people who can legally call themselves ‘accountant’ and provide numerous services to the public, without being subject to any accountability framework or governance requirements,” the submission said.

“This is a considerable regulatory gap for those who are not members of a professional accounting body and who hold no statutory registration. These people are also able to operate in the consulting industry without regulatory requirements or scrutiny.”

The IPA then went on to suggest restricting the use of the term “accountant”

“One possible model is to define the term ‘accountant’ at law, which would have the flow on effect of capturing at least some of these people in an appropriate regulatory framework, thereby enhancing consumer protection, accountability for government projects, and improving regulatory efficiency,” the IPA submission said.

“With respect to consultants, we note that even though the Institute of Management Consultants has developed an ethical code, consultants are generally not required to be members and so are largely not subject to any ethical standards,” it said.

“This position is understandable from a historical perspective given that consultants do not present themselves as having particular qualifications and are engaged by a generally sophisticated client base to perform a diverse range of work, to which a single ethical code would not necessarily be appropriate.”

“Clients are free to engage consultants on the contractual terms that are agreed, including terms relating to probity. However, recent issues demonstrate how the reliance upon consultants by the Australian public and private sectors is such that the public interest requires consultants to be subject to stricter standards.”