TPB outlines ground rules for accountant breach reporting

Accountants are about to experience the same increased breach reporting obligations as financial advisers with the Tax Practitioners Board (TPB) issuing draft guidance around how they should handle the new regime which applies from 1 July.

The TPB guidance documentation mirrors that issued to financial advisers summarising the obligations as:

• require tax practitioners to report ‘significant breaches’ of the Code of Professional Conduct (Code) in the TASA:

1. • relating to their own conduct, and
   • by other registered tax practitioners.

• In order to trigger a reporting requirement, registered tax practitioners must have reasonable grounds to believe a breach of the Code has occurred, and that the breach is significant.
• Breaches must be reported to the TPB. If the breach is by another registered tax practitioner it must also be reported to the recognised professional association(s) (RPAs) of that tax practitioner.
• The breach reporting obligations are in addition to other existing obligations under the TASA that require tax practitioners to notify the TPB if they cease to meet a registration requirement, about events affecting their continued registration, and other changes in circumstances.

Describing what represented “significant breaches” the guidance said:

Significant breaches’ of the Code are breaches that satisfy one of the following tests:

1. are an indictable offence, or an offence involving dishonesty, under an Australian law
2. result, or are likely to result, in material loss or damage to another entity (including the Commonwealth)
3. are otherwise significant, taking into account:
   • the number or frequency of similar breaches by the tax practitioner
   • the impact of the breach on their ability to provide tax agent services, and
   • the extent to which the breach indicates that their arrangements to ensure compliance with the Code are inadequate, or
4. are prescribed by the Tax Agent Services Regulations 2022.

Releasing the documentation, TPB chair, Peter de Cure said the TPB aimed to take a pragmatic risk-based approach to implementing the additional reporting obligations.

He noted that the major professional association had provided early input on the guidance.

“By raising the professional and ethical standards of tax practitioners, breach reporting will improve the provision of tax practitioner services, enhance consumer protection, and increase community confidence in the integrity of the system that regulates those services and the tax industry,” de Cure’s statement said.