Professional accounting agencies were asked about their operational models, expressing their interests, while monitoring the behavior of their members.
An Australian Parliamentary investigation raised serious concerns about potential conflicts of interest in professional accounting agencies.
The investigation, led by Greens Sen. Barbara Pocock, raises questions about the integrity of these organizations, particularly regarding their dual role.
Pocock cited a 2023 review at a recent hearing, noting that chartered accountants organizations such as Australia and New Zealand (CAANZ) are responsible for managing members’ professional behavior while collecting fees from members.
“Accounting bodies like Caanz need to receive fees from members, represent their interests and manage the actions of those members at the same time,” she said.
In response, Caanz general manager Kristen Wydell acknowledged that there was indeed a conflict of interest.
However, she pointed out that her organization has a way of managing it through many regulations.
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“The main thing is that decision-makers for our programme of action are not members of Certified Public Accountants in Australia and New Zealand,” she told the Parliamentary Joint Committee on Business and Financial Services.
“We have an independent body: the Professional Action Committee, the Disciplinary Tribunal and the Appeal Council.
“These three organizations are a combination of members and non-members, but not employees and are not engaged in the management of (The)Caanz.”
Wydell also noted that the management team that managed the professional behavior of accountant members maintains information separate from all other types of Caanz activities.
“There are structural elements and reporting line elements there. So by having those independent decision makers on these committees, we reduce the risk of conflicts of interest,” she said.
There are no conflicts of interest: IPA
Meanwhile, Vicki Stylianoou, an executive at the Institute of Public Accounts (IPA), rejected the idea of conflicts of interest that existed in her organization.
“I believe there is no conflict of interest,” she said.
“Because we collect fees from our members, we have never shown any evidence of a dispute.
“We are a true nonprofit organization, so we must also act for the public interest. We are very conscious of that and balance the public interest with the interests of our members.”
Stylianou also said the IPA’s disciplinary courts are “very independent” as they are not run by members of the accounting organization.
“We’ve introduced a lot of new people recently. (We’ve) got a lot of lawyers. We have a lot of lawyers that have nothing to do with the IPA and their members,” she said.
“That’s why I would completely reject such a position.”
ASIC response
The issue of conflicts of interest has attracted attention from the Australian Securities and Investment Commission (ASIC), which oversees financial services.
Pocock asked the ASIC about possible reforms, including the possibility of removing conflicts of interest among professional accounting bodies by stripping the investigative and disciplinary functions and establishing a single independent body to carry out these functions.
However, ASIC Commissioner Kate O’Rourke said there was no insight into issues other than those relating to her organization.
“Our focus is very important on what has been focused on ASIC or influenced the monitoring of ASIC auditors,” she said.
