By Michelle Stevenson

Members of CA ANZ have a strong desire to do the right thing but, each year, CA ANZ deals with complaints. Kate Dixon and Rebecca Stickney – leaders of the CA ANZ professional conduct teams in Australia and New Zealand – say the types of complaints are broadly consistent year to year: conflicts of interest, client management issues, disputes relating to records, and technical issues. In 2020-21, conflicts of interest were, yet again, the biggest problem.

If a complaint is made against you the key is to resolve the issue as best you can. “Even when a client complains, consider if there are steps you could take to try and get the relationship back on the right footing – even if they’re leaving. It’s that kind of general level of professionalism [that CAs should aim for],” says Stickney.

“Even when a client complains, consider if there are steps you could take to try and get the relationship back on the right footing – even if they’re leaving.”

Conflicts of interest

Complaints about conflicts of interest arise because there’s a perceived threat to objectivity. And divorces and other family upsets can see chartered accountants caught in the middle. A frequent example is when a couple’s relationship is ending and both parties want you to continue acting for them. There is a high potential for animosity despite the best of intentions from all parties.

The key is to have good conflict management processes established in advance, says Dixon. This could include documentation that details:

• how you disclose any conflict of interest
• what informed consent looks like
• what safeguards you’ll make use of
• in what scenarios you’ll stop acting for a client or clients, and so on.

“But regardless of what you have done in advance, you must always review and keep reviewing the actual situation,” says Dixon.

“There may be no conflict of interest to start off with, but as time goes on, this may change. Your approach to conflicts of interest can’t ever be set and forget; it needs to be continually re-evaluated. And I think that’s a key thing that is often missed.”

“Your approach to conflicts of interest can’t ever be set and forget; it needs to be continually re-evaluated.”

Stickney is also seeing conflicts of interest concerning CAs acting as trustees and/or executors while also providing other professional services.

In a recent case, a CA ANZ member was engaged for a couple, their individual trusts and partnership, and as trustee of the husband’s trust. The idea was to protect the clients’ separate property following a second marriage.

Material accounting errors were discovered after the husband’s death, resulting in unequal allocation of the joint expenditure to the respective trusts, to the wife’s detriment. But the member didn’t address the wife’s request to rectify the errors in deference to their obligations as trustee and the interests of the trust. Rectifying the issues could have exposed the trustees to a claim from the husband’s other beneficiaries.

The Disciplinary Tribunal found that the member had failed to identify the conflict of interest from the outset, did not implement appropriate safeguards and had lost their objectivity.

Issues can also arise when a trust deed or will is out of date and not fit for purpose. Periodically, CAs should raise with clients whether they should get some up-to-date legal advice to ensure their arrangements are still appropriate.

Client management

CA ANZ also receives complaints about client management. This may be as simple as not returning phone calls in a timely way. But other issues crop up due to a lack of clarity on what work is being done for which client, fees, and if work falls outside existing agreements.

It is important to remember that terms of engagement are required for all engagements, no matter how small.

CAs also need to have a process for dealing with a complaint when it’s raised. CA ANZ has a number of cases each year about CAs failing to adequately engage with a complaint.

Issues relating to books and records

One area in which a complaint can come as a surprise to CAs is in relation to failure to hand over books and records, particularly as there might be disciplinary implications as a result.

For example, sometimes CA ANZ members think they’re entitled to a lien – a claim against assets to satisfy a debt. While that may be the case, accountants also have obligations in relation to the provision of books and records to clients when they move on.

Dixon strongly recommends getting legal advice. “The key takeaway is: it’s not just a commercial negotiation about whether you hand over the records,” she says. “You do need to consider your professional obligations, your terms of engagement, and the requirements of the law, because there could be broader ramifications.”

Technical issues

Non-compliance with relevant technical standards or requirements in specialist areas such as assurance, insolvency, tax or valuations also produces complaints.

Stickney says CAs need to be careful not to take on work outside their area of expertise. You also need to check the statutory requirements or restrictions for specialist work, such as needing to be accredited in certain insolvency and assurance engagements.

If in doubt, take advice before accepting the work. And check that it’s included under your professional indemnity insurance policy.

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.

Visit: charteredaccountantsanz.com/member-services/mentoring-and-support/ca-advisory-group
Call: 1300 137 322 (Australia) or 0800 4 69422 (New Zealand)