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Should the Govt legally enforce professional standards?

Mike Taylor1 March 2024
Hands touching tablet with ethics

The Government could consider imposing elements of ethical infrastructure on firms by legal means to promote, and potentially enforce, professional standards, according to the Professional Standards Authority (PSA).

In a submission filed with the Parliamentary Joint Committee on Corporations and Financial Services, the PSA said that literature and research suggested there could be significant benefits from imposing elements of ethical infrastructure onto large consulting firms with the force of law.

It said this could be achieved in two main ways:

“First, through contract and procurement requirements. The Commonwealth Government has significant purchasing power as a large buyer of services from consulting firms. It could impose ethical infrastructure on consulting firms via whole-of-government pre-qualification panel contracts. This could include monitoring and reporting requirements, even extending to audits. The effectiveness of this could be enhanced by the participation of state and territory governments.

“Second, ethical infrastructure requirements could be legislated. Obligations could be imposed on firms of a certain size or level of earnings via statute, including monitoring and reporting. If needed, an existing or new regulatory body could be provided with relevant audit, investigation and enforcement powers. A registration system could be implemented if stronger options are needed,” it said.

“However, we note these would be complex reforms requiring extensive consultation. They could take some time to implement,” the PSA said.

Mike Taylor

Mike Taylor

Managing Editor/Publisher, Financial Newswire

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