Independent enforcer to police accountant’s standards

In an effort to ensure professional and ethical standards applying to accountants are more transparent and forceful, CPA Australia and the Institute of Chartered Accountants (ICAA) have jointly announced the establishment of an external board to police the industry’s code of conduct.

The new board will contain a maximum of eight members, comprised of people from the public sector, corporate sector, small and medium practices, the auditing profession, academia and the public. Within this structure CPA Australia and the ICAA will each have at least two members on the board.

In a joint statement released today the two bodies said the motive behind the formation of the Accounting Profession and Ethical Standards Board (APESB) was to increase public confidence by allowing the process of setting professional standards to be more open to public scrutiny. In particular, both CPA Australia and the ICAA wanted to ensure perceptions of self-interest regarding ethics were completely removed.

“Having standards set by an independent body ensures they are more robust and transparent, which is good for the public and the profession,” CPA president Mark Coughlin said.

The APESB will be responsible for preparing a joint code of professional conduct, a set of miscellaneous professional statements, as well as a set of guidance notes that all CPA Australia and ICAA members will be bound by.

The processes the APESB will employ to achieve its objectives include a yearly review of the professional and ethical standards in place, a review of newly implemented standards six months after their introduction, receiving comment about proposed standards from the public and professional bodies, and continual monitoring of the effectiveness of the standards in place.

A group of technical staff employed by the APESB, called the Secretariat, will be on hand to offer the board support.

It is expected that the board will be finalised by early January 2006 and that the Secretariat will be in place by the end of March 2006.

Last week, a new set of professional conduct standards for financial planners was launched by the ICA and CPA Australia.

The Statement of Financial Advisory Service Standards (SFASS), also referred to as the APS 12 statement, will come into effect on November 1, following a consultation period among members of both bodies, industry regulators and stakeholders.

Buyer of last resort arrangements that have a product bias have been disallowed, and some soft dollar payments, such as overseas trips that include no educational content and volume-based payments, have been banned outright.