CA ANZ Statement on Parliamentary Joint Committee on Corporations and Financial Services Report
Please quote a spokesperson for Chartered Accountants ANZ:
Chartered Accountants ANZ (CA ANZ) acknowledges the work of the Parliamentary Joint Committee into Ethics and Professional Accountability: Structural Challenges in the Audit, Assurance and Consultancy Industry and have engaged extensively with the Committee through appearances, submissions and responding to questions on notice.
The Committee’s report is extensive and requires time to be carefully considered.
On initial review, we are pleased to see some recommendations echo our own Going Further roadmap. In particular, the strengthening of resourcing and effectiveness of the chief government auditor regulator, Australian Securities and Investments Commission (ASIC), and other bodies such as the Companies Auditors Disciplinary Board, as well as recommendations in relation to whistleblowers and whistleblower protections.
We also welcome recommendations focused on improving accountability and transparency of large firms. Enhancing the reporting and governance obligations of large professional services firms is also a central tenant of our roadmap to enhancing trust and accountability within the profession.
Protecting the term ‘accountant’ with legislation (Recommendation 27), so that only qualified accountants who are members of a professional body can use it, is a very positive step to safeguarding our profession and points to the valuable role our members play in the Australian economy.
However, there are also recommendations that do not appear to consider evidence provided to the committee.
Recommendation 25, 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.
As we clarified in our opening statement here, CA ANZ 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.
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.
In 2022, we conducted an extensive review of our framework and last year our members voted in favour of a number of recommendations to strengthen our ability to respond to behaviour deemed unethical, including increasing fines for firm events fivefold.
As we have outlined to the committee, the ability to impose significant fines, like we have seen from the Public Company Accounting Oversight Board (PCAOB), requires statutory powers under legislation. During recent appearances at both the Senate and Parliamentary Joint Committees, CA ANZ said we would gladly accept the ability to do the same, should the government choose to go down that path.
In relation to Recommendation 3, we are not persuaded that changes to partnership caps will drive better governance or culture in firms. Partnership caps in the corporations legislation are historic and have been repealed in other jurisdictions as irrelevant.
CA ANZ does not shy away from scrutiny and transparency. This is why we have already taken steps to publish and proactively provide to key stakeholders a Professional Standards Annual Report for Australia, with information regarding reviews, conduct, discipline and other relevant information. We also currently report to the Financial Reporting Council (FRC), Tax Practitioners Board (TPB) and Professional Standards Council (PSC). We believe Recommendation 25 is duplicated effort and does not mirror approaches in other sectors with a scheme.
CA ANZ is continuing to review the recommendations and will provide its membership with a comprehensive response to the report in due course.
ENDS
Media Contact
Gillian Bowen
M +61 (0)411 485 421
About Chartered Accountants Australia and New Zealand
Chartered Accountants Australia and New Zealand represents more than 139,000 financial professionals, supporting them to make a difference to the businesses, organisations and communities in which they work and live. Chartered Accountants are known as Difference Makers. The depth and breadth of their expertise helps them to see the big picture and chart the best course of action.
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