- A significant source of complaints investigated by CA ANZ relate to issues that breach the fundamental ethical principles.
- Members can share their view on what the outcome should be, so it is useful to look at the CA ANZ website to see how similar cases were resolved.
- Even if you avoid membership termination, a disciplinary outcome can still have a big effect.
By Michelle Stevenson
As a member of CA ANZ, having your membership terminated following a complaint – and subsequent investigation – would have to be the worst-case scenario. But what about when your membership is suspended or you receive a lesser sanction?
What can lead to a suspension?
A significant source (number?) of complaints investigated by CA ANZ relate to issues that breach the fundamental ethical principles. These include loss of objectivity or conflicts of interest during professional engagements, failure to act with professional competence and due care, and breaches of confidentiality. Breaches of integrity also feature.
Integrity breaches cover everything from inappropriate handling of client monies to a lack of fair dealing and truthfulness, while a lack of professional behaviour can include non-compliance with relevant laws and regulations or bringing discredit to the profession.
Some breaches are egregious enough to result in a chartered accountant having their membership terminated, but that’s not the case in every matter, explain Kate Dixon and Rebecca Stickney – leaders of the CA ANZ professional conduct teams in Australia and New Zealand respectively.
Of the 20 CA ANZ Disciplinary Tribunal decisions finalised in Australia last year, six resulted in suspensions rather than termination of membership. Those cases were related to insolvency, a failure to have a Certificate of Public Practice, an adverse finding against a member and failures to respond to complaints.
Four members received sanctions less than suspension for breaches related to independence and conflict issues and a failure to comply with audit standards. The sanctions ranged from the imposition of a censure, removal of a member’s Certificate of Public Practice (CPP) and a requirement to have a quality review.
In New Zealand, 13 cases were resolved at the Disciplinary Tribunal last year. Five resulted in a member’s suspension, four in termination and four in censure. Members who were suspended or censured also received fines, bans against undertaking specific assignments for a period (for example, no assurance or insolvency engagements), cancellation of their CPP, among other orders.
“Some of the cases involved members being misleading, such as falsification of a mentor’s report for admission to full membership and misuse of their manager’s electronic signature. Similarly, we had another case that involved misuse of the audit engagement partner’s signature and inserting that into an audit report when the partner hadn’t signed off that work yet,” says Stickney.
The context is considered
It’s important to note that every case turns on its facts – there is no one-size-fits-all approach. However, the disciplinary bodies will make an assessment of mitigating and aggravating features, looking at things such as:
- risk to the others (employers, clients or the public)
- seriousness of the conduct
- harm to the reputation of the profession
- prior disciplinary record
- other examples (if any) of dishonesty or unprofessionalism
- insight (discussed in more detail below)
- the stage of the member’s career (in some cases)
- other personal circumstances
- behaviour during the complaints process
- willingness and ability to rehabilitate.
Beyond that, the disciplinary bodies will look for consistency with other cases where possible. The member can also share their view on what the outcome should be, so it can be useful to look at the CA ANZ website to see how similar cases were resolved.
Non-termination still has flow-on effects
Even if you avoid membership termination, a disciplinary outcome can still have a big effect. Case outcomes are published on the CA ANZ website and, in most cases, the member is identified. That means the information is public and will often pop up in an online search. In this way, it could hinder incoming business. A disciplinary sanction can affect existing business, too. For example, you may be prohibited from practising in certain areas for a period of time.
“We have had cases where members are prohibited from undertaking assurance work for a period. In these recent cases, it’s been for a period of five years. So if assurance was a significant component of their business, that can have quite a dramatic impact,” says Stickney.
An adverse disciplinary record may also affect progression in CA ANZ membership and be taken into account by other professional bodies, employers or agencies.
Cooperation can affect the outcome
Dixon is quick to point out that a member’s behaviour throughout the process also has an effect.
“When you don’t cooperate, the outcome can be worse. Five of the cases at the CA ANZ Disciplinary Tribunal level last year included an aspect of failure to respond and the member’s membership was either suspended or terminated. That may not have happened in all cases if they had been more cooperative with the process,” says Dixon.
“When you don’t cooperate, the outcome can be worse.”
On the flip side, if you do cooperate with the process – and show insight into the issues at hand – members may face a less serious sanction.
The return to membership
In both Australia and New Zealand, it’s now a breach of the by-laws and NZICA Rules to fail to comply with the tribunal decision. A failure to do so could have further consequences for a member.
If a case does result in suspension, there are some conditions for returning to membership. These include requirements to:
- remain fit and proper
- ensure any outstanding sums and/or fines are paid
- complete continuing education during the suspension period, or as required.
“If anything further comes up during a member’s period of suspension that could undermine their [status of being] fit and proper – for example, a member was made bankrupt or received a conviction – that could be an impediment. Members should be mindful of the conditions for returning to membership,” says Stickney.
“Members should be mindful of the conditions for returning to membership.”
Find out more:
Need help? Call CAAG or check CA ANZ’s resources
The CA Advisory Group provides counselling and support for chartered accountants facing ethical dilemmas or weighing career decisions.
Local panels of experienced CAs offer guidance for fellow members, and can provide you with advice and support on a range of professional and ethical matters.
The CA Advisory Group service is free and all discussions are strictly confidential.
Call: 1300 137 322 (Australia) or 0800 4 69422 (New Zealand)