Protecting our profession

indikator für binäre optionen Consumer protection has been high on the agenda in law reform over the past two decades. This focus has led the accounting profession to face increased regulation in a range of areas.

prelievo minimo autopzionibinarie Changes in the areas of financial services and tax regulation have been at the forefront as a result of reviews conducted by the Federal Government. These policy areas are always in the public eye given that they impact on the current and future incomes of the average person.

click here While this focus on individual policy areas deals with specific service areas, it does not provide holistic protection to consumers that use the services of accountants.

prova gratuita su iqoption Scope for abuse

There is no law preventing any person in Australia from calling themselves an ‘accountant’ and offering accounting services to the public. There is also no law that prohibits those who have committed offences such as theft or fraud in an accounting role from offering services to the public as an accountant.

This situation poses a risk to the financial security of consumers who turn to individuals they believe are qualified to provide them with advice on matters which affect their financial wellbeing and that of their businesses.

The lack of protection of the term ‘accountant’ is inconsistent with the legal protection afforded to other professions such as doctors, engineers and lawyers where strict registration conditions apply. Practitioners in these disciplines must meet minimum standards in order to use those titles and consumers are therefore protected. The Institute believes it is time for the term ‘accountant’ to be given appropriate legal protection given the responsibility which accountants have and the overarching requirement for consumer protection.

watch The current situation

Australia presently has no jurisdiction that protects the term ‘accountant’ or any derivative such as ‘public accountant’ or ‘practising accountant’. While there are a series of registrations that accountants must hold if they wish to provide a certain service to the public there is no law or regulation that defines the term ‘accountant’ for the general protection of consumers.

The areas to which these registrations apply are taxation, audit, bankruptcy and insolvency, credit services and financial services. Failure to comply with the laws associated with that registration can lead to enforcement action from the relevant regulator and – in extreme circumstances – the loss of the registration. However, no law provides protection for clients who might use an unqualified person for the compilation of accounts, bookkeeping services, business coaching or company secretarial services.

An individual can offer services as an accountant to clients without a recognised qualification, without ongoing training, without public liability insurance, without being subject to professional and ethical standards and without being subject to professional practice quality assurance reviews. All of these are requirements of accountants who are members of a professional accounting body such as the IPA. Further, we believe that nothing under current law prevents an individual convicted of a criminal offence moving from one Australian state to another, opening a practice and calling themselves an accountant.

Professional accounting bodies such as the IPA are able to discipline accountants who are members. The harshest penalty the Institute can impose is the revocation of membership. However, this does not prevent an individual from continuing in practice. Accountants are not required to be members of a professional accounting body, and we believe approximately half of all those describing themselves as accountants are not members of one of the three professional accounting bodies in Australia.

see Registration in the past

Australia had a registration process for accountants who wished to offer services to the public in New South Wales from 1945 to 1989. The Public Accountants Registration Act 1945 set down a series of requirements for individuals wishing to hold public accountant registration: the applicant had to be 21 years of age or older, be of good fame and character and be a member of a professional accounting body.

The 1945 Act also required that the applicant was either already working within an accounting practice or was “about to engage in the practice of his profession or calling as a public accountant either on his own behalf or in partnership with any other registered public accountant”1. The law also made it an offence for anyone to pass themselves off as a qualified public practitioner. Members of the public had a general protection in law in New South Wales until 1989 when the Act was repealed.

At the time of the repeal it was argued that state-based recognition of the term ‘accountant’ was not essential. Areas of practice such as audit had parallel national regimes and the repeal of state law was designed to eliminate duplication. This was especially the case with audit because the state legislation included references to audit which may have been inconsistent with the national regime. The repeal was also said to have been supported by professional accounting bodies at that time.

The gap has remained unfilled at a Commonwealth level with only functional registrations such as registrations for the provision of audit services.

follow Consequences of removal

The removal of legal protection of the term, however, did have a noticeable impact, with researchers identifying case studies of individuals who would have been prevented from defrauding clients. Academics at the University of Wollongong (UoW) have noted that the absence of general public protection has had an impact2. The repeal of the 1945 Act meant that an accountant convicted of a fraud involving $1.5 million in client funds was able to continue as an accountant in public practice despite the conviction and forfeiture of his membership of the Australian Society of Certified Practising Accountants (ASCPA), now known as CPA Australia. The 1945 Act’s provisions would have prohibited this individual from continuing in practice as he would not have met the requirements to be of good character.

Analysis from the UoW academics also notes the cases of two individuals who did not meet experience requirements of the ASCPA and were subsequently convicted of fraud and obtaining a financial advantage by deception. These individuals would never have been allowed to open an accounting practice had the general protection available under the 1945 Act still been available with the various conditions it had in place. Comparisons with other jurisdictions

Some overseas jurisdictions have registration regimes for accountants in professional practice. Accountants in the United States who offer services to the public must be registered with a state-based registration board. It is probably one of the better know registration models across the world. Singapore has a regime that requires accountants wanting to offer services to the public to be registered with the regulator, the Accounting and Corporate Regulatory Authority (ACRA). South Africa also has a system that works on the same principle, particularly focused on the regulation of auditors.

There has been a long-standing debate on legal protection of the term ‘accountant’ in both Ireland and the United Kingdom. The debate has not resulted in legislative amendments despite continuing pressure from the professional accounting bodies in those two countries on this particular issue. In Ireland’s case the debate has been pursued by the Irish profession for almost eight years.

الخيارات الثنائية الشكاوى التداول The public interest

Strengthening consumer protection is in the public interest. The Government has done this in a range of areas related to taxation (such as the Tax Agent Services Act), superannuation (eg, Stronger Super), financial services (eg, Future of Financial Advice) and credit law over the past few years. It should be no different in the case of assuring consumers that they are using the services of an individual who meets a set of minimum requirements to practise as an accountant.

This can be achieved by defining the term ‘accountant’ in law to mean a member of one of the three recognised professional accounting bodies. Such a definition would restrict the use of the term to those who are qualified and hold membership of a professional accounting body.

Members of these bodies meet stringent requirements related to ethical and professional conduct and continuing professional development. They are also required to hold a specific registration in a discipline such as tax, audit or insolvency if they choose to practise in these areas. This type of recognition is consistent with that currently provided in other areas of the law such as the regulations governing the audit of self-managed superannuation funds.

It is in the public interest to ensure consumers receive accounting services – irrespective of what they may be – from a person who is qualified to provide them. The Institute is concerned that the status quo could lead to customers being exploited or misled. Protection of the term ‘accountant’ would be a first step to ensuring those who are unqualified are weeded out of the system.

forex halmstad eurostop öppettider Endnotes

  1. A copy of the Public Accountants Registration Act 1945 can be viewed at sessionalview/sessional/act/1945-18.pdf
  2. Bowery G, Murphy B, Smark C and Watts T (2007) On Foxes Becoming Gamekeepers: The capture of professional accounting regulation by the Australian accounting profession.


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