By Alexandra Johnson

Chartered accountants fill a vast array of key roles dealing with significant financial and regulatory issues. While most carry out their responsibilities without incident, Chartered Accountants Australia and New Zealand (CA ANZ) receives about 300 to 400 complaints per year, most of them involving members in public practice.

The majority of the complaints are resolved by the Professional Conduct Committee (PCC), many without a formal disciplinary outcome against the member. Some, after investigation, are referred on to the Disciplinary Tribunal for a disciplinary hearing.

According to Kate Dixon and Rebecca Stickney, leaders of the CA ANZ professional conduct teams in Australia and New Zealand respectively, during the 2021–2022 financial year, the majority of complaints resolved by the Disciplinary Tribunal focused on three main areas:

• Members with criminal convictions
• Members the subject of adverse findings (findings made by a court, regulator, professional body or authority, or a condition or restriction placed on a professional membership, registration or licence in a member’s name)
• Failure to respond to requests made by clients or CA ANZ.

Additionally, a number of complaints related to ethical and technical issues including conflicts of interest, confidentiality and breaches of assurance standards – a reminder for CAs to have good conflict management practices in place, ensure they keep their technical competency up-to-date – and upskill if necessary.

In Australia, of the 16 matters that went to the Disciplinary Tribunal, all but three involved adverse findings or criminal convictions, Dixon says. Of the remaining three, one involved personal insolvency and two involved aspects of failing to respond to CA ANZ and/or a client and failure to provide books and records.

Seven cases were resolved by the Disciplinary Tribunal in New Zealand in the year to June. “The cases included criminal convictions, bankruptcy, breaches of technical standards and public practice rules, misleading New Zealand Institute of Chartered Accountants [NZICA], conflict of interest and integrity,” Stickney explains.

Failure to respond

When a member fails to appropriately respond to a complaint, it can exacerbate the situation, says Dixon, referring to a case where a member failed to provide records to another accountant when his client wanted to take his business elsewhere. Later, when the member was being investigated by CA ANZ, he continued to withhold the information.

“The member refused to provide the books and records to the new accountant because he did not agree with the manner in which the new accountant had been appointed and then he refused to properly engage with the CA ANZ investigation for a very long time,” Dixon says.

Due to the significant delay, the member was referred to the Disciplinary Tribunal and he ultimately received a fine and a censure, which is a formal expression of displeasure by the Tribunal which remains on a member’s record.

“In imposing this sanction, the Tribunal highlighted that the member’s breaches were serious and sustained over a lengthy period and that it is unsatisfactory for a member not to take any investigation seriously and not to give total cooperation to the investigation process,” Dixon says.

“In imposing this sanction, the Tribunal highlighted that the member’s breaches were serious”

Although the case was complicated by the fact that it involved a family dispute, this did not assuage the member’s responsibility to respond, she adds.

Adhering to CA ANZ By-Laws

Stickney confirms members are required, in accordance with their professional responsibilities under the By-Laws and Rules, to respond in a timely manner. “Failure to engage constructively or at all with the complaints process is a serious matter and can lead to adverse disciplinary outcomes, including sanctions and fines,” she says.

“Potentially it can even lead to interim suspension or termination of membership. It’s an important member obligation.”

In another case in Australia a member had his tax agent registration terminated by the Tax Practitioners Board (TPB). He was also required by CA ANZ to undertake a quality review. However, because he did not adequately respond to CA ANZ about the quality review, it couldn’t be performed.

“The member didn’t engage with our process at all,” says Dixon. “The Tribunal found he’d failed to comply with CA ANZ’s requirements, which are necessary for the maintenance of good order and management of CA ANZ.

“As a result of this and the adverse finding against him by the TPB, his membership was terminated.” In New Zealand, non-compliance with client money rules featured in one of the cases, although this was not a case of dishonesty.

“The member did not have a trust account in place and was not accounting for client money properly through that mechanism,” Stickney explains. She also cites a case whereby a staff member in the process of resigning their employment, downloaded proprietary documentation and templates from their employer without authority, adding this was not an isolated instance.

“In the previous year, a CA who was going into sole practice took templates and other information from their employer. In both cases this amounted to misconduct in a professional capacity and the members were suspended.

“The Tribunal is sending a strong message that they take this behaviour seriously,” Stickney adds. “They were charged in the context of breach of integrity. Acts such as these potentially expose employers to breaches of their client confidentiality and privacy obligations.”

“Acts such as these potentially expose employers to breaches of their client confidentiality”

Criminal convictions

Members who have been charged or convicted of crimes also come under intense scrutiny by CA ANZ’s disciplinary bodies, “as a criminal conviction is not only a breach of the By Laws and NZICA Rules but often also amounts to a breach of professional ethical expectations,” says Stickney.

This past year the tribunal examined a number of such cases on both sides of the Tasman, including theft, child sexual abuse and serious drug charges.

While the Disciplinary Tribunal will always consider the individual circumstances, matters of this nature typically result in the member’s membership being terminated or suspended.

Resources:

A guide and previous Acuity articles offers additional guidance: