Part of the harmonisation of the Chartered Accountants Australia and New Zealand by-laws and New Zealand Institute of Chartered Accountants rules through the CA ANZ Professional Framework Review has been to align the offences which can result in sanctions on a member. This resulted in the introduction of the new offences of ‘misconduct’ and ‘conduct unbecoming of a member’ into the CA ANZ by-laws.

As with all issues brought to the attention of the disciplinary bodies, the offences of misconduct and conduct unbecoming of a member may result from a complaint from a member of the public or another member, a practice review, another regulatory body, or CA ANZ or NZICA’s own monitoring processes.

The new by-laws came into effect in Australia on 25 January 2024.

Rebecca Stickney and Kate Dixon, leaders of the professional conduct teams in New Zealand and Australia respectively, discuss how these offences have functioned historically in New Zealand’s NZICA rules and the impact this change will have on CA ANZ members when facing disciplinary action.

“The offences in the by-laws and rules provide a clear recognition of both lesser and more serious types of conduct,” says Stickney. “Generally, findings of misconduct or conduct unbecoming will lead to more serious sanctions of suspension or termination of membership.”

Among other things, the member made payments from a client’s bank account to their own and a family member’s accounts, in flagrant breach of professional standards. This member had their membership revoked.

Misconduct

Dixon says the new by-law that defines misconduct, the more serious of the two conduct-related offences, is including conduct which would be regarded by a reasonable and informed third party as disgraceful, dishonourable or bringing discredit to the profession of accounting.

“It includes a wilful or reckless failure to maintain the proper standard of professionalism, integrity, care, skill, competence or diligence of or in relation to the member’s professional duties and obligations,” she says.

Members found to have committed the misconduct offence are likely to be deigned as unfit to hold CA ANZ membership and will have their membership revoked.

Stickney says wilfulness and recklessness are key components of this offence. “It is flagrant disregard for upholding professional standards. These are the most serious cases we consider.”

Examples of the types of cases where misconduct has been found include double billing, charging for work that’s unnecessary, bad conflicts of interest where members put their own interests ahead of a client’s, providing false and misleading information, or misappropriation of funds.

“A wide range of conduct can come within the offence, but it will always have an element where the behaviour is grossly unprofessional, lacking in integrity or brings discredit to the profession,” she says.

Stickney recalls a case where a member was found guilty of misconduct, having downloaded proprietary documents onto USB drives without proper authority. “The member was an employee of an accounting firm, had resigned from their position and intentionally copied confidential client information.”

In another case, a member was found guilty of misconduct, having failed to comply with the client monies rules. “Among other things, they made payments from a client’s bank account to their own and a family member’s accounts, in flagrant breach of professional standards. This member had their membership revoked.

Conduct unbecoming of a member

The next most serious offence that has been introduced to the CA ANZ by-laws is conduct unbecoming of a member.

Dixon says this includes conduct which would be regarded by a reasonable and informed third party as unprofessional or unbecoming of a member. It also includes a substantial or consistent failure to maintain the proper standard of professionalism, integrity, care, skill, competence or diligence of or in relation to the member’s professional duties and obligations.

“As with misconduct, conduct unbecoming cases cover a wide range of behaviour,” she says. “Past cases have included significant or sustained non-compliance with professional or technical standards, amending files prior to practice review, or liquidating a company to avoid adverse court costs orders.”

Members found guilty of conduct unbecoming can be censured or fined, although more serious cases have resulted in suspension and termination, says Stickney.

Other examples of conduct unbecoming cases have involved members admitting to market manipulation in contravention of the New Zealand Financial Markets Conduct Act, resulting in the imposition of significant civil pecuniary penalties by the high court.

“The CA ANZ Disciplinary Tribunal, in considering whether the charge of conduct unbecoming had been made in one such case, stated that ‘not every breach of the code of ethics constitutes conduct unbecoming to an accountant. The threshold is inevitably one of degree, and what is acceptable is to be determined according to standards applied by competent, ethical and responsible practitioners’,” explains Stickney.

“While the member did not make any direct monetary gain, their actions had the potential to adversely affect members of the community who invest in the share market. The member accepted they failed to comply with relevant requirements of the Financial Markets Conduct Act and that they knew, or should have known, that their conduc