An adverse finding or sanction from a regulatory body doesn’t only damage your professional reputation; it also raises questions about your fitness to be a CA ANZ member.

Kate Dixon and Rebecca Stickney – leaders of the CA ANZ professional conduct teams in Australia and New Zealand – say adverse findings and sanctions could be related to a range of issues. They may be connected to a civil or criminal court decision. It could be due to disciplinary action taken by another professional body or from an investigation by regulators such as the Australian Securities and Investments Commission (ASIC) or Tax Practitioners Board (TPB) in Australia, or the Financial Markets Authority (FMA) or Companies Office in New Zealand. 

In some cases, members may lose their membership or registration held with another agency or have other conditions or penalties imposed. They may enter undertakings, receive a conviction, be made bankrupt or generally have their conduct denounced. 

“Members have express obligations under the CA ANZ By-laws and NZICA Rules to notify us of a number of matters, including convictions, insolvency, an adverse or unfavourable finding by a court, another regulator, professional body or authority and the imposition of a condition or restriction on a professional membership, registration or licence in the member’s name,” explains Stickney. 

Where matters are reported or picked up through CA ANZ’s own monitoring, they may be investigated by the organisation’s Professional Conduct Committee and result in disciplinary action. 

Tax Practitioners Board outcomes 

Some CA ANZ members have had their tax agent registration withdrawn by the TPB for not observing their personal or professional tax obligations, says Dixon. 

“In 2021, a member had his tax agent registration terminated by the TPB for four years and he was disqualified from applying for registration during that period,” she explains. 

“The TPB found the member breached the code of professional conduct for tax agents, and that he was no longer a fit and proper person to act as a tax agent. When this member was brought before CA ANZ’s Disciplinary Tribunal in relation to this and other matters, his CA ANZ membership was terminated.” 

Other CAs who have been in trouble with the TPB have been terminated for different periods and received sanctions from the CA ANZ disciplinary bodies, including censures. Such sanctions can have serious ramifications. 

“There’s a risk of reputational harm affecting your good standing with clients or employers. There’s the stress and disappointment of professional relationships potentially ending,” explains Dixon. “Sometimes clients will observe disciplinary sanctions of a member and decide to leave the practice, or it can have a bearing on current and future employment.” 

“Sometimes clients will observe disciplinary sanctions of a member and decide to leave the practice.”

While New Zealand does not have a TPB equivalent, tax agents are granted similar agency by Inland Revenue which may be removed by the Commissioner, says Stickney. 

“Some members have been referred to the New Zealand Disciplinary Tribunal where their tax agency has been removed as a result of persistent failure to meet filing obligations or the accountant has not met their own tax obligations and have large arrears not under arrangement.” 

“Some members have been referred to the New Zealand Disciplinary Tribunal where their tax agency has been removed.”

A bad day in court extends further 

Adverse findings by courts can also result in disciplinary action. “This can cover a broad range of issues,” Stickney says. “For example, criticism by a court of the member’s credibility as a witness; findings that a member was negligent or incompetent in the performance of client engagements; criticism of a member who the court found had assisted a client hide assets from a liquidator; and criminal convictions or other judgments where the member’s conduct is found to be unethical or illegal.” 

Members banned from acting as directors by the New Zealand Registrar of Companies is another example, says Stickney. “The Registrar will periodically prohibit people from being directors, which has resulted in suspension of membership for the period of the banning order in past disciplinary cases.” 

Dixon says in Australia in recent years, members have been banned by the Commissioner of Taxation from acting as a superannuation trustee or a responsible officer of a corporate trustee where the superannuation entity had contravened the relevant legislation, “and similarly, as a result members can end up in the CA ANZ Disciplinary Tribunal,” she says. 

In other cases, members have faced disciplinary action following proceedings brought under the Financial Markets Conduct Act 2013 or its preceding legislation for various breaches such as market manipulation, non-disclosure of interests or for making untrue statements in prospectus or investment statements.   

Become familiar with disclosure obligations 

The key, says Stickney, is not to treat any finding or sanction from an external body in isolation. Adding that, while all issues should be reported to CA ANZ within the timeframes under the By-Laws and NZICA Rules, not all disciplinary action from external bodies will be investigated. In fact, if a member self-reports such matters, that may be considered a factor in their favour. 

And just as CA ANZ monitors other regulatory bodies to identify adverse findings against CAs, any disciplinary sanction made under CA ANZ By-Laws or NZICA Rules may need to be reported elsewhere and have a bearing on a CA’s other registrations. 

Both Dixon and Stickney urge members to become familiar with their disclosure obligations and let CA ANZ know if anything untoward is occurring in their lives. 

Issues members should self-report

Stickney says members have an obligation to report anything that would constitute a fundamental breach of their ethical obligations or the bylaws and rules. This includes things such as: 

• criminal offences, including tax offences
• misappropriation of funds 
• misuse of client monies or assets 
• adverse findings against the member, whether in the courts, by a regulator or by another professional body 
• personal or business insolvency 
• otherwise acting in a manner that brings discredit to the profession. 

It also extends to other types of conduct that could breach the fundamental ethical principles, such as where the member has made an error of judgement in dealings with a client. 

How to self-report

Members must report any aspect of their conduct that breaches the By-Law, Rules and standards to the Professional Conduct Committee within seven days of occurrence. 

Members in Australia and rest of world 

Complete the appropriate form: 

Disclosure Event  

Notification Event

Email form to: [email protected] 

Members in New Zealand 

Email: [email protected] 

Include: 

• Member details 
• An explanation of the event and when event occurred 
• Copies of any relevant supporting documentation. 

The full list of matters which members are required to disclose are set out in the ‘By-Laws and Rules’

Do you need help?  

The CA Advisory Group provides free, confidential support for chartered accountants facing ethical dilemmas or weighing career decisions. Call 1300 137 322 (Australia) or 0800 4 69422 (New Zealand), or go to bit.ly/CA-AG.