[Australian] Accounting body tells members to make annual pledge to be ethical
Feb 7, 2024
Chartered Accountants ANZ will force members to make an annual pledge that they will obey their obligation to behave with integrity and competence as part of a push by the professional body to restore trust in the sector.
A series of 14 actions and recommendations in a publication sent to members on Wednesday will also ask the government to push through stalled audit reforms and clarify the extent of the corporate regulator’s power to police audit firms.
CA ANZ chief executive Ainslie van Onselen.
In addition, CA ANZ will create training aimed at non-accounting members who are partners at major firms and open up a similar affiliate membership for non-accounting staff at these outfits to ensure they understand the “ethical frameworks, disclosure obligations and general membership requirements” of being a part of the body.
The emphasis on enhanced ethics and regulation is being made after a series of scandals in the sector centring on the big four consulting firms – including exam cheating by KPMG partners and staff and the PwC tax leaks scandal – cast an unwelcome spotlight on the profession. A joint federal inquiry is now scrutinising the structure of the big four firms.
“What this does is provide 14 specific actions that we think that [we at] CA ANZ, as the professional membership body, as well as the [Accounting Professional and Ethical Standards Board] ... and the government can do to enhance trust in the profession,” chief executive Ainslie van Onselen said.
All members will be required to “formally reaffirm their intention to comply with the Chartered Accountants’ commitment” and promise to “act in the public interest and with integrity” when they renew their membership, the CA ANZ publication Going Further says. Members must renew annually so they can practise.
The amount of mandatory ethical training that CA ANZ members have to complete will also increase from two hours every three years to six hours during the same period. The body also wants the ethics standards board to oblige members to report wrongdoing by other members.
Ms van Onselen also called on the federal government to push through audit reforms recommended by an earlier inquiry that have been stalled since 2020.
She has also written to the government to request it increase funding to the Australian Securities and Investments Commission so the regulator can increase the breadth of its audit inspection program. ASIC was criticised last year when it axed its annual report card on the big four accounting firms’ audit quality, cut the size of the audit inspection program and ditched its chief accountant.
In November, CA ANZ fined PwC Australia the maximum possible at the time, $50,000, plus costs of $45,000, and imposed reporting requirements on the firm over its tax leaks scandal. The maximum fine has since been increased five-fold to $250,000.
The body has sanctioned fewer than 20 members from big four accounting firms in the past seven years. As of last year, big four personnel make up 10 per cent, or 13,600, of the body’s 137,000 members.
An investigation into an unspecified number of PwC members over the PwC tax leaks remains ongoing.
Former ACCC chairman Graeme Samuel has ideas for how to improve the audit sector.
[Financial Review]
