Navigating ethical and professional risks
Many disciplinary matters stem from common, avoidable missteps. Here are the key risks facing members and how you can stay on the right side of professional obligations.
Each year, the Professional Conduct Committee (PCC) receives numerous complaints and concerns about members. The New Zealand Institute of Chartered Accountants (NZICA) and CA ANZ disciplinary bodies handled more than 750 complaints over the past year. While the circumstances vary, several recurring themes emerge time and again. The good news is that many of these issues can be avoided through careful planning, robust processes and a proactive approach to ethical decision making.
Kate Dixon and Rebecca Stickney, leaders of the CA ANZ professional conduct teams in Australia and New Zealand, discuss how understanding the most common pitfalls can help members reduce risk, meet their professional obligations and maintain public trust.
Academic integrity and AI
Dixon says academic integrity concerns were the dominant issue before the disciplinary bodies, particularly in Australia, although they were also seen in New Zealand. Many were historical, reflecting the proactive approach the PCC in Australia has taken.
“As well as self-reports of historical answer sharing in CA Program quizzes, we’ve received a number of self-reported breaches of academic integrity linked to firms’ internal testing and assessments,” she says.
More recently, this has included the use of AI during assessments where it was prohibited, a problem education providers around the world are grappling with.
“We have had more than 25 self-reports from members who used AI in internal testing where this was not permitted,” says Dixon.
Stickney and Dixon acknowledge that accountants are increasingly encouraged to use AI to work more efficiently yet being told to avoid it during assessments can feel at odds with how they work day-to-day.
“This is fundamentally an integrity issue,” says Dixon. “If AI use is prohibited and a member has affirmed they will not use it, it’s a real problem if they choose to do so anyway. The issue is not the technology itself, but the breach of trust and the false confirmation.”
Disclosing court and regulatory findings
The second most common theme this year involved matters arising from findings by courts, and other professional and regulatory bodies.
“Members must tell CA ANZ and NZICA about any findings against them, including criminal convictions and non-criminal adverse findings, as required under the rules and by-laws,” says Stickney.
She warns that not reporting these findings is something the disciplinary bodies can weigh up.
“It can lead to additional sanctions, because it shows a disregard for reporting obligations. On the other hand, coming forward early may count in a member’s favour,” Stickney says.
Examples the disciplinary bodies dealt with this year included insider trading and breaches of the continuous disclosure obligations under the Financial Markets Conduct Act 2013 (NZ), which led to civil penalties. In Australia, matters included regulatory action by the Tax Practitioners Board and the Australian Securities & Investments Commission (ASIC).
Managing conflicts of interest
Failing to manage conflicts of interest properly remains a consistent theme. Dixon says conflicts are not uncommon and will arise at some stage for most practitioners, so the key is to be prepared.
“Establishing good conflict management processes in your firm and setting out in your engagement letter exactly what services you are providing and to whom, are just some of the precautions members should adopt.”
Public practice and membership obligations
Another common issue is failing to meet CA ANZ and NZICA requirements, such as practising without a Certificate of Public Practice (CPP) or, in Australia, not meeting a CPP holder’s obligation to provide information under the Professional Standards Scheme. Dixon says it pays to stay across what membership requires.
“It’s important to keep up to date with the obligations of membership. The Professional Standards and Member Care teams in Australia and New Zealand are always happy to help, as is the Chartered Accountants Advisory Group (CAAG).”
The disciplinary bodies have also dealt with a range of client service complaints.
“These include fee disputes, often caused by inadequate terms of engagement, unprofessional behaviour, and a lack of due care and diligence,” Dixon says.
Most of these are avoidable with good practices in place.
“Ensure you have good, regularly updated terms of engagement with your clients. Know your different obligations to different clients, even when they are part of a group,” Dixon says.
How you communicate matters.
“Be polite and cordial. Tell the client what you expect from them, what you are going to do, and flag any deadlines and delays,” says Stickney. “And put everything in writing, so there’s no room for misunderstandings. A quick email to make sure everyone is on the same page can save hours dealing with an unhappy client or a complaint.”
Financial distress and solvency
With ongoing economic pressures, personal and practice solvency issues have featured more prominently this year. Stickney encourages members in financial difficulty to deal with it early, before it escalates.
“Reach out early. Talking things through can make a real difference. If you’re finding it hard to call in your debts, it may be worth getting some advice or extra support to manage them.”
She also encourages members to take an honest look at their business.
“Ask yourself where your efforts are best spent. Do you have the right structure in place? Is the business still sustainable?”
Crucially, Stickney urges members to stay on top of their taxation obligations and to keep in mind their fiduciary obligations with GST and employer deductions, including PAYE, KiwiSaver or other employer superannuation contributions, child support and student loans. Failing to pass these deductions on can have serious disciplinary and potentially criminal consequences for the member and unfairly disadvantages their staff.
Says Stickney: “If you are not managing these, take advice. Don’t put your head in the sand.”
Need help?
The CA Advisory Group (CAAG) 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 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) and ask for a CAAG referral.
Take aways
For further reading refer to these previously published Acuity articles: