At a glance
- IPA urges profession proactivity in leading ongoing reforms from PwC scandal.
- The UK offers options for how profession-led regulation could work in harmony with governmental oversight.
- Protecting the term “accountant” a crucial way to protect the public and improve the profession’s respect.
On the last day of the IPA National Congress, a heavy-hitting panel took to the stage to discuss the ongoing fallout from the PwC scandal, and how the Parliamentary Joint Committee (PJC) inquiry and its report released in November 2024 would reshape the accounting profession.
IPA Group Executive Advocacy and Professional Standards Vicki Stylianou said:
“The PJC report has 40 recommendations, and in my view, if they get implemented in whole or in part, it has the potential to fundamentally change the way the accounting profession is regulated.
“The IPA and other professional accounting bodies have already made a lot of changes to our disciplinary systems, especially around independence. And I think it is incumbent upon us to not wait for the government to implement recommendations, but to be proactive and to look at the recommendations and to see how we can implement some of them ourselves.”
Overseas inspiration
Financial Reporting Council Chair Andrew Mills said the current environment offered opportunities to make positive change.
“If you have a broad practice, you have the TPB, the ATO, ASIC, the professional bodies, even APRA for some, playing a role in regulating you.
“Here is an opportunity to rationalise some of that regulation for the profession.”
Mills pointed to the UK’s Financial Reporting Council, and the manner in which it works hand in hand with the professional bodies to regulate as offering valuable lessons for Australia’s future.
“There’s no reason why we couldn’t have the professional bodies coming together to create an independent body that could do the disciplinary investigations and processes,” he said.
“It would also raise the level of independence and by doing so raise the level of acceptance of the way in which it operates.”
PJC chair Senator Deborah O’Neill said while much progress has been made, much remained undone.
“It’s not regulation alone that can deliver the changes that are needed,” she said.
“It’s the will of the sector itself and a desire for the necessary changes to culture.”
Accounting Professional and Ethical Standards Board Director Rachel Grimes AM said acquiring legislative backing of the compliance and enforceability of professional standards would be crucial.
“But it needs to be a level playing field. We don’t want members of the profession not being able to compete for larger contracts that other consultants may be able to who are not restricted by an ethical code,” she said.
“All the consultants to the government should have some sort of ethics code.”
Respecting the term
IPA Board President Cheryl Mallett said one regulatory change that was sorely needed was making ‘accountant’ a protected term, so that only qualified accountants who are members of a professional body can use it, for which IPA has been advocating for more than a decade.
“… Joe Blogs can go and watch a video on how to get themselves around MYOB and Xero and then hang up their shingle and call themselves an accountant.
“Protecting the term accountant would give us all of the respect that we deserve for being in this profession.”
Mallett said this would also provide greater protection to the public.
“When people go to see an accountant, they are not aware that it’s not a protected term, so they see the word ‘accountant’, and they think they’re going into someone who’s qualified, who has got all of this regulation around them,” she said.
“And it’s just not true.”
Take the high road
Mills said recent Governance Institute research had shown that while people’s trust in their own accountant was incredibly high, trust in the profession as a whole was much lower.
“It’s worth remembering that the trust your clients have with you may be incredibly good, but the trust that the general public have in the profession still has a way to be repaired, and I think the PJC inquiry provides some of the pathway for that,” he said.
Mallett said one of the most important takeaways for IPA members was the importance of putting ethics first.
“Sometimes you’ve got to be brave to be ethical. Sometimes you might have a client putting pressure on you to do something that’s just not quite right, or to let them get away with something.
“And you have to be brave, and you have to take risks and say, ‘No, you’re not going to push me on this race to the bottom’.
“I can guarantee, if you maintain that attitude, the clients will keep walking in the door and you will end up with clients who want you to do the right thing. I’ve done it myself in my own business.”
Mallett also urged members to lean on the IPA as they navigated professional challenges and the new regulatory regime. “We’re here to help, and we’ve got two of the leading advocates in the profession in Vicki Stylianou and [IPA Senior Tax Advisor] Tony Greco, representing us at government level. They can help you, and that’s what we’re here for,” she said.
More information here on IPA’s Consultation paper – Response to PwC – Review of the eligibility requirements for tax practitioners registration with the Tax Practitioners Board.
