Date posted: 11/04/2024

Chartered Accountants ANZ: reaction to PCAOB finding against KPMG Netherlands

Any breach of integrity standards is serious and should be dealt with accordingly. To that end, CA ANZ notes the PCAOB’s strong action against KPMG Netherlands following investigations and findings of improper answer sharing and misconduct.

The PCAOB is the primary regulator of its US and foreign registered public accounting firms, and US legislation gives it broad powers to investigate and enforce adherence to its ethics and independence standards.

In Australia, CA ANZ is a private membership body, whose By-Laws enable it to hold members to account. Our members (and members of other professional accounting organisations) are bound by the Code of Ethics for Professional Accountants to observe standards of integrity and professional behaviour.

From mandatory ethics training to free Continuing Professional Development and increasing our members’ awareness of their disclosure obligations, we are constantly improving the way we educate our members about their ethical obligations.

Those aspiring to join our profession through the CA Program must abide by the rules and regulations set out in the CA Program policies, in particular the Candidate Academic Integrity Policy and Procedure.

As a TEQSA accredited higher education provider, we comply with the Higher Education Standards Framework which has a key focus on academic integrity. Consistent with these standards, CA ANZ expects our teachers, candidates and all members of our CA Program academic community to uphold academic integrity by acting with honesty, trust, fairness, respect and responsibility.

In 2021, the new CA Program was rolled out with a renewed focus on academic integrity and ethics in practice including a dedicated Ethics in Business subject, ethics embedded throughout the CA Program curriculum and a mandatory academic integrity learning module.

Over the year to mid-2023 we interrogated our Professional Conduct Framework, with a report that recommended a series of strengthened disciplinary and other processes to ensure ethics and integrity remain the cornerstone of our profession.

This included an examination of the CA ANZ frameworks to address academic integrity, the outcome of which was confirmation that CA ANZ has the mechanisms to look at individual members and conduct within firms in relation to academic integrity matters.

It also included the response to Firm Events, which is important when considering the cultural issues that may underlie the type of conduct involved in the PCOAB determination.

Following the review, late last year CA ANZ members voted in favour of amending the By-Laws to adopt those recommendations, indicating that both CA ANZ and its members want a robust, independent and fair framework.

Over the past few years academic integrity within firms has been a compliance focus for CA ANZ. Our expectations have been extensively communicated to the firms and members, and we have provided them with a range of resources to help them understand their ethical obligations.

However, as is the case with any major accredited Tertiary Education provider, matters do occur.

CA ANZ’s independent Professional Conduct Committee (PCC, which comprises senior Chartered Accountants, lawyers, ethicists and academics) receives and initiates more than 400 complaints each year related to incidents where members’ behaviour may not have met the high ethical, technical and professional standards expected of the Chartered Accountant’s designation.

Among these, we can confirm that CA ANZ’s disciplinary bodies have initiated investigations and intelligence gathering in relation to allegations involving academic misconduct.

For reasons of procedural fairness and natural justice and to avoid prejudice to those active investigations, as outlined by the CA ANZ By-Laws that govern our members and the Conduct and Disciplinary Framework, we cannot provide further details.

CA ANZ takes academic integrity very seriously, and the vast majority of our members live by CA ANZ’s By-Laws and the profession’s Code of Ethics.

The ability to impose significant fines like we have seen from the PCAOB requires statutory powers under legislation. During recent appearances at both the Senate and Parliamentary Joint Committees, CA ANZ has told the inquiries that we would gladly accept the ability to do the same, should the government choose to go down that path.