Date posted: 31/07/2023 8 min read

Strengthening the disciplinary framework

Members are key to the Professional Conduct Framework Review rollout and upholding the standing of the CA designation.

In Brief

  • The recommendations of the CA ANZ Professional Conduct Framework Review were released in June 2023.
  • The review found the disciplinary framework met or exceeded International Federation of Accountants requirements and compared favourably with similar professional organisations worldwide, but also found areas that could be strengthened.
  • There are 37 recommendations aimed at extending the existing features of the disciplinary framework. Those that require changes to the CA ANZ by-laws or NZICA rules will be put to a member vote in the lead-up to the CA ANZ AGM.

The professional body representing more than 135,000 chartered accountants is giving its members an opportunity to help strengthen its disciplinary framework, to ensure it can effectively uphold the professional and ethical standards of the profession and adequately respond to breaches.

The findings of the Professional Conduct Framework Review, initiated by Chartered Accountants Australia and New Zealand last year, were shared with members on 7 June 2023. The release coincided with a senate inquiry in the Australian Parliament into consulting services and an ongoing investigation by the Australian Federal Police linked to a Tax Practitioners Board finding against a former PwC Australia partner.

“It’s important our by-laws, rules and frameworks are best practice, so they can meet the contemporary challenges our profession faces today,” says CA ANZ chief executive officer Ainslie van Onselen.

“There’s a spotlight on the accounting profession and ‘the charge’ – the commitment to the profession that chartered accountants make at their graduation ceremony – has never been more important,” she says.

Some of the review’s key changes will require members to vote in the lead-up the AGM in October 2023.

Ainslie van Onselen, CEO of CA ANZPictured: Ainslie van Onselen, CA ANZ. Image credit: CA ANZ

“It’s important our by-laws, rules and frameworks are best practice, so they can meet the contemporary challenges our profession faces today,”
Ainslie van Onselen, CA ANZ

Firm events

One of the major proposed changes is the disciplinary response to ‘firm events’. A firm event is a prescribed event involving the practice entity, such as criminal convictions and adverse findings by the courts, a regulatory authority or a similar body, in relation to the entity’s professional or business conduct, competence or integrity.

The review proposes a five-fold increase in maximum fines for firm events to A$250,000 at the Disciplinary Tribunal level and A$100,000 at the Professional Conduct Committee level.

“The review recommendations propose enabling the disciplinary bodies to more efficiently investigate and resolve firm events, and to levy material sanctions on the firms via members who are partners. This is in addition to disciplining any individual members involved. The community and our profession expect nothing less,” says van Onselen.

“Our global benchmarking exercise found that this recommendation is either in line with or, in some cases, stronger than organisations similar to ours.”

The increase in fines for firm events is also backed by the Honourable Dennis Cowdroy AO KC, a former federal court justice, who performed an independent review of the recommendations.

The fines for individual members will remain at current levels.

“The recommendations expand on the existing features of the disciplinary framework to enable the disciplinary bodies to respond to events involving firms and to identify systemic and cultural issues underpinning them,” says van Onselen.

Investigating former members

Another significant recommendation relates to former members. Currently, if a chartered accountant in Australia cancels their CA ANZ membership, the body is unable to investigate complaints against them.

The review proposes aligning the Australian framework with what is already in operation in New Zealand. It would allow the disciplinary bodies to investigate all members, regardless of membership status — closing a loophole that allowed Australian members to avoid disciplinary action by resigning.

“This isn’t about going after anyone in particular – this change is about bringing us in line with our framework in New Zealand. The details of how this will be implemented requires further work and we will spend time in the lead-up to the member vote, looking at how best those powers will work in practice,” says van Onselen.

Optional firm membership

A proposed change for New Zealand is the introduction of voluntary firm membership, which aligns with the Australian approach. There’s also a recommendation to strengthen the powers of the disciplinary bodies to engage a panel of experts in appropriate cases and the introduction of a conciliation process.

The review has also recommended consolidating disciplinary decisions into a single online public register, which displays all disciplinary decisions made at all levels (Professional Conduct Committee, Disciplinary Tribunal and Appeals Tribunal).

“The register will also include statistics and data about complaints dismissed and the grounds for dismissal. This one-stop shop, if you like, will increase transparency and accountability. The purpose of the register is to centralise and streamline how this information is captured and shared. It’s about increasing transparency, and continuous improvement,” van Onselen says.

Time for change

Not all of the recommendations require member approval. Some of them can be actioned as a matter of course: such as guidance to clarify members’ general disclosure obligations, improving protocols for the handling of informal disclosures of conduct issues to CA ANZ people, and the introduction of a minimum of two hours per triennium of mandatory verifiable ethics training for all members.

The more significant changes require member approval.

“None of our members would be enjoying the headlines of recent weeks, especially the overwhelming majority who live up to the charge every day and do the right thing,” says van Onselen. “There is never an excuse for unethical behaviour. Actions from just a few have the potential to cast a shadow on our profession.

“We want to take the opportunity to extend our disciplinary framework through the recommendations to ensure ethics and integrity remain the cornerstone of our profession,” she stresses. Van Onselen has asked members to look out for information on how to vote in the lead-up to the AGM, and has encouraged them to get involved in this important process.

Have your say

Members will have until 5:00pm AEDT/7:00pm NZDT on 20 October 2023 to cast their vote.

Read the Professional Conduct Framework Review and its recommendations in full on the CA ANZ website.

Review timeline

  • July 2022
    CA ANZ announces the Professional Conduct Framework Review
  • August 2022
    CA ANZ releases the review’s terms of reference
  • 30 November 2022
    Review submissions close
  • 31 May 2023
    The CA ANZ board receives the final report, the independent review and the committee’s response to the independent review
  • 7 June 2023
    Review findings are shared with members
  • October 2023
    Members to vote on changes to CA ANZ by-laws or NZICA rules in the lead-up to the AGM