By Michelle Stevenson

Self-reporting serves a crucial purpose: to help CA ANZ uphold the public interest in relation to the professional conduct of its members.

Kate Dixon and Rebecca Stickney – leaders of the CA ANZ professional conduct teams in Australia and New Zealand, respectively – point out that these self-reporting obligations are newly codified in the bylaws and New Zealand Institute of Chartered Accountants (NZICA) rules, and urge members to familiarise themselves with the requirements.

What issues should members 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.

A proactive approach to self-reporting is always preferable

Dixon and Stickney understand why members may be hesitant to self-report. However, they agree being proactive is always preferable, as it may be taken into consideration as a mitigating factor with regard to the final outcome of any complaint or investigation.

That’s not to say the member won’t be found to have breached the bylaws or rules, or the Code of Ethics. However, if they have self-reported the issue, this demonstrates a level of professionalism and insight that may have a bearing on the severity of any penalty.

“If CA ANZ doesn’t need to identify the issue itself and go through a significant investigation, this may short-circuit some disciplinary steps, or speed up some of that procedure,” Stickney says.

For example, the Professional Conduct Committee recently determined a member’s actions in preparing false financial statements – at the request of a more senior employee – demonstrated a failure to comply with the fundamental principle of integrity under the Code of Ethics.

However, the committee took into account a number of mitigating circumstances, including that the member had self-reported the matter to both CA ANZ and his employer, and the remorse that he demonstrated. These factors resulted in a lesser sanction than might otherwise have been imposed.

On the other hand, if a member fails to self-report, this can result in more serious sanctions. For example, the disciplinary bodies may consider whether the member’s blatant disregard of obligations to CA ANZ is consistent with remaining a member.

At what point should members self-report?

“Members don’t have an obligation to report a complaint made against them. They only have an obligation to report a breach of the bylaws or Code of Ethics,” Dixon explains.

So if a member has been convicted of an offence or is subject to an adverse civil finding that’s under appeal, when should they tell CA ANZ? Stickney says at the earliest occasion possible.

“At the point that they are convicted, even though they may be appealing that conviction, they should err on the side of caution by telling us at that point... Generally speaking, if matters are afoot in another forum, our investigation will be adjourned pending the conclusion of that other matter,” she explains.

Regardless of whether a member’s appeal is successful or not, CA ANZ may still conduct its own investigation, depending on the nature of the matter. For example, if it relates to the way a member has handled a professional engagement or something of that nature, CA ANZ may investigate from a professional competency point of view.

“If the member comes forward so CA ANZ doesn’t need to go through a significant investigation, this may short-circuit some of those disciplinary steps.”

Key points to know about self-reporting

Not all members are fully aware of their self-reporting obligations, so should contact CA ANZ if they’re unsure about how to meet them.

However, if a member is unsure whether or not they have an obligation to report something and is nervous about contacting CA ANZ, they can ask their lawyer or a trusted adviser to contact CA ANZ on their behalf. The CA Advisory Group is happy to provide a member with general information and advice on a confidential basis.

Once the member understands what is required of them, they should advise CA ANZ of the issue in writing. In this documentation, the member should include the following information:

• the nature of the issue
• a chronology of the issue (if possible)
• any supporting documents, such as court decisions, certifications of conviction, etc.

Members can also include a personal statement and/or supporting statements or references from other people. If members don’t do this from the outset and CA ANZ decides to investigate the matter further, there will be an opportunity to include additional information at a later date.

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