The Final Report puts forward a set of recommendations for the CA ANZ Board and NZICA Regulatory Board to consider.
In making its recommendations, the Committee sought to consider and balance the principles of natural justice; the rights of individual Members, including with respect to privacy and due process; the public interests of transparency and accountability; and the broader interests of the accountancy profession and other stakeholders.
The Committee also considered the broader regulatory and co-regulatory context, including the role that CA ANZ and NZICA play in upholding the professional and ethical standards of the profession.
The Committee identified a number of opportunities to enhance the Conduct and Disciplinary Framework, which was reflected in their recommendations. Some of the key recommendations include:
- Building on the existing rules to enable CA ANZ and NZICA to more effectively deal with events involving firms. This includes simplifying notification procedures to make it clearer there is an onus to report these events and issues, while increasing the maximum fines that can be imposed by:
- The PCC from $25,000 to $100,000 under a Consent Agreement.
- The Disciplinary Tribunal from $50,000 to $250,000.
This improves the handling process and accountability for Firm Events when they happen in the future.
- Changing the current situation where CA ANZ cannot undertake an investigation into the conduct of former Australian Members. This will allow the disciplinary bodies to investigate regardless of membership status. For example, this would close a loophole that allows Members to avoid disciplinary action by terminating their membership.
- Introducing voluntary firm membership in New Zealand which aligns with the Australian approach.
- Strengthening the powers of the disciplinary bodies to engage a panel of experts in appropriate cases.
- Introducing a suite of administrative and case management enhancements to reduce the complexity of disciplinary proceedings.
This includes the introduction of a conciliation process, as seen in other regulatory bodies. This means a complaint may be referred to conciliation, where complainants and CA ANZ Members can engage in a facilitated alternative dispute resolution process.
It will also include streamlining and further alignment of the rules between Australia and New Zealand as much as possible.
- Creating more extensive guidance materials for all Members about the independent disciplinary process, their personal self-disclosure obligations and making ethical obligations clear.
This builds on work already underway to streamline and simplify guidance materials for CA ANZ Members.
- Consolidating Disciplinary Decisions into a single online public register which displays all disciplinary decisions made at all levels (PCC, DT, AT). In addition to the CA ANZ Annual Report, the register will include statistics and data about complaints dismissed and grounds for dismissal. This will increase transparency and accountability.
In conducting its Review, the Committee found that the Disciplinary Framework:
- Meets or exceeds the standards set by the International Federation of Accountants
- Is consistent with mandatory components of the Professional Standards Council Model Rules.
- Meets or exceeds international and peer benchmarks.
- Responds appropriately and proportionately to proven academic misconduct by Provisional Members, in relation to assessments and examinations undertaken for the conferral of the CA Graduate Diploma.
- Confers powers to the disciplinary bodies to consider certain matters pertaining to Firm Events.
List of consolidated recommendations
1. Harmonisation and Modernisation of Liability Rules
1.1 Harmonise and align NZICA Rule 13 and By-Law 40 as far as possible, to establish a single, common set of Disclosure, Offences and Sanctions provisions for all Members regardless of where they practise.
Establish a category of optional membership under the NZICA Rules for Practice Entities (firms) to align with the Australian membership rules.
1.2 Clarify that a finding of work-place, or work-related, sexual harassment, harassment, bullying, direct discrimination or vilification against a Member, or a Practice Entity of which the Member is a Principal, by a court, tribunal or other competent authority, is within scope of the Disciplinary Framework and engages the Member’s obligation to report to CA ANZ / NZICA (as applicable) and that a binding determination against a Member or Practice Entity by such a court, tribunal or other competent authority is an Offence.
1.3 Allow complaints about former Australian Members’ conduct prior to ceasing to be a Member to be investigated and determined, to align with the NZICA Rules.
2. Operationalise the existing obligations of Members as partners and principals of Practice Entities (Firms)
2.1 Develop reporting guidance for Members who are Principals (partners or directors) of Practice Entities (including partnerships and incorporated practices) to clarify their existing obligation to notify the PCC of prescribed events involving the Practice Entity, such as criminal convictions and adverse findings by courts, regulatory authority or similar body, in relation to the entity’s professional or business conduct, competence or integrity (Firm Events). Implement streamlined procedures to facilitate notification of Firm Events to the Professional Conduct Committee (PCC). Develop and document procedures for handling such notifications through Regulations.
2.2 Build on and strengthen the existing rules that enable the PCC and disciplinary bodies to consider Firm Events by:
(a) defining which of the existing PCC actions and other Sanctions may be taken or apply in connection with Firm Events, noting that certain Sanctions (such as suspension and termination) have limited or no applicability to Members as partners/principals but who are otherwise collectively responsible for Firm Events, whilst other Sanctions, such as requiring those Members to submit to a practice review or to pay a fine, may be appropriate; and
(b) increasing the maximum aggregate fine that may apply collectively to the Members who are partners/principals in relation to such Firm Events:
- from $25,000 to $100,000 at the PCC level; and
- from $50,000 to $250,000 at the Disciplinary Tribunal level.
Sanctions and fines for any individual Member who is involved in a Firm Event and whose involvement/conduct may have breached the Code of Ethics or the By-Laws or the NZICA Rules remain at current levels and may apply in addition to any Sanctions that apply to the Firm Event.
3. Guidance to clarify Members’ general reporting obligations
3.1 Develop and consolidate existing guidance material relating to Members’ obligations to disclose relevant conduct information to CA ANZ at admission, on renewal and to report Notification Events and Disclosure Events to the PCC during their membership. Guidance is to include non-exhaustive categories of ‘discreditable’ conduct that Members are bound to Disclose to the PCC. The complete list of Notification Events and Disclosure Events is to be built into the Mandatory Declarations that Members make on admission and at membership renewal, along with a general ‘fit and proper’ declaration. Provide practical guidance to self-disclosure obligations where confidentiality undertakings apply.
3.2 Review and develop internal policies and procedures to ensure informal disclosures of Notification Events and Disclosure Events are appropriately handled and referred to the Conduct team.
4. Strengthened interim suspension powers
4.1 Clarify the drafting of Interim Suspension provisions to make it clear that the Disciplinary Tribunal (DT) may suspend a Member on an interim basis if any of the conditions listed in the proposed revision of the provision is present.
4.2 Clarify that the power of the PCC to make an application to the DT to make an interim suspension order applies to any or all of the Member’s membership, Certificate of Public Practice, or relevant CA ANZ/NZICA issued licences or specialisations, and may be made on an ex parte basis or on a short notice basis, with additional revocation, appeal and publication rules to enable expedited publication to further secure the protective objects of interim suspension orders.
5. Enhanced administrative and case management procedures
5.1 Implement administrative enhancements, to enhance governance oversight of the system and/or to reduce the costs and complexity of disciplinary proceedings:
(a) alignment of the roles of the NZICA Regulatory Board in New Zealand and the Professional Conduct Oversight Committee (PCOC) in Australia, with the PCOC’s oversight role to be expanded to include oversight of CPD monitoring and quality review functions;
(b) the introduction of a conciliation process and powers for the PCC to refer a complaint to conciliation, and use of alternative dispute resolution processes at various stages of the disciplinary process;
(c) establishing requirements that the composition of the Tribunals and Appellate Bodies include at least one legally qualified Member skilled in administrative law to be the chair in disciplinary hearings, subject to transition arrangements. Explore options for limited cross-membership between the Australian and New Zealand bodies;
(d) the development of a framework for engaging a Panel of Experts to assist with the investigation of complaints relating to technical matters that the PCC considers would benefit from specific expertise; and
(e) amendments to the By-Laws, NZICA Rules and Chair delegations (as applicable) to enhance case management, including to:
- allow conferral of experts with additional supporting guidance and rules on the use of experts, expert witnesses’ conduct rules (to augment existing expert witness rules) and powers for the disciplinary bodies to provide directions to experts;
- to clarify the role and functions of the reviewer/reviewer of complaints in connection with the review of PCC dispositions, to provide a process for factual accuracy review of such reviewers’ draft reports prior to finalisation;
- the development of guidance material and other advisory resources for complainants and Members to help them to understand the decisions the disciplinary bodies may make or are likely to make based on precedents or previous decisions of the bodies (as applicable);
- update the existing costs regime;
- give Members notice of their right to legal representation, the availability and effect of applicable privileges, and whether evidence is being recorded or transcribed and the purposes for which evidence may be used, at all stages of the disciplinary process;
- provide an expedited procedure for certain ‘uncontested’ Offences; and
- resolve editorial and typographical amendments.
6. Fairer and clearer publication and confidentiality requirements, that preserve the independence of the disciplinary bodies
6.1 Give Members notice of all complaints made about them, including complaints that have been, or may be, dismissed as vexatious or for any other reason prescribed by the By-Laws or NZICA Rules.
6.2 Provide guidance to Members about the disciplinary bodies’ powers with respect to publication of decisions.
6.3 Clarify that CA ANZ’s and NZICA’s powers to make public statements about disciplinary matters applies to Disciplinary Tribunal (DT) and Appeals Tribunal (AT) / Appeals Council (AC) as well as PCC decisions and is subject to any suppression orders made by a court, tribunal or directions given by the PCC and/or disciplinary bodies themselves.
6.4 Establish a single online public register of all disciplinary decisions with public records available for 7 years, including statistical data about complaints dismissed by the PCC and grounds for dismissal. Publish timely and relevant data to give Members and the public information about the performance of the disciplinary framework. Generally make information regarding the Disciplinary Framework more easily accessible on the website.