MEDIA STATEMENT (AU)

The CA ANZ Professional Standards Scheme (‘the Scheme’) protects consumers by ensuring access to insurance-backed compensation where a professional services engagement results in a court-awarded damages claim for loss.

The Scheme is designed to deal with professional negligence claims, such as mistakes in advice, tax work, audits or financial reporting. It does not cover deliberate misconduct such as fraud, dishonesty or breaches of trust.

The first CA ANZ Scheme commenced in 1997, and the current Scheme is one of eighteen approved schemes (alongside schemes in place for lawyers, valuers and building surveyors). It applies to approximately 30,000 of our 140,000 members who work in public practice in Australia.

The NSW Professional Standards Council, one of the independent statutory bodies established under legislation to oversee schemes, approves the Scheme, based on CA ANZ meeting requirements set by the Professional Standards Act 1994.

These requirements include the submission of a Professional Standards Annual Report, a Code of Ethics and consumer access to an independent conduct and disciplinary function. It also requires continuous improvement in professional standards of participants through Quality Practice Reviews, continuing professional development and monitoring of public practice credentials.

How liability caps work

The Scheme does not limit liability for damages arising from a breach of trust, fraud or dishonesty. Scheme participants remain fully liable under the law for this kind of conduct, and any attempt to rely on a limitation of liability under the Scheme for such conduct would not succeed.

For civil claims involving professional negligence where a liability cap does apply, the liability cap is determined by the size and type of engagement, and generally the greater the fee for the engagement, the higher the cap.

For example, engagement fees below $100,000 carry a liability cap of $2 million. At the other end of the scale, work with fees above $2.5 million is covered by a cap of up to $75 million for audit and assurance services.

For insolvency, tax, risk and financial advisory services, the cap is generally $20 million, although a higher cap of up to $75 million may apply in some circumstances.

These caps are approved under professional standards legislation and are based on independent actuarial analysis of claims data.

Caps apply to each claim, and to rely on the Scheme, a participant must maintain professional indemnity insurance so that any successful claim can be paid.

CA ANZ’s Professional Standards Scheme remains active and was recently renewed by the NSW Professional Standards Council for a further five years, to 2030.

To find out more about the scheme, visit CA ANZ’s Professional Standards Scheme webpage.