Parliamentary Joint Committee on Corporations and Financial Services relating to the inquiry on Ethics and Professional Accountability: Structural Challenges in the Audit, Assurance and Consultancy Industry.

Overall, the IPA supports the recommendations from the report and believes they will go a long way to restoring trust in the profession, if they are implemented.

IPA believes that we must take a holistic and coordinated approach to ensure that we achieve a cohesive and robust outcome in order to restore trust and confidence and to improve accountability and governance. 

IPA, as well as many other stakeholders, has spent a lot of time in consultation on the regulation of the auditing profession.  We note that the previous Parliamentary inquiry into the regulation of the auditing profession in Australia was not dealt with in a timely manner.  So, we are hopeful that the recommendations relating to audit will be considered in the context of this inquiry.  

There are numerous recommendations which IPA believes will strengthen the regulatory environment, including those relating to whistleblowing, partnerships, large firms and consultants. 

In particular, IPA supports the expansion of the information sharing provisions to enhance transparency and collaboration between stakeholders including regulators and professional accounting bodies, and their co-regulatory function.

Recommendation 27, which relates to legislating the term ‘accountant’ is especially welcome by IPA – we have been advocating for this for over a decade.  This will make a significant difference to restoring trust in the profession and protecting consumers.

IPA also welcomes the Committee’s approach to the regulatory framework for the investigation and disciplinary functions applicable to the accounting and auditing professions.  We are also pleased that the Committee recognises the regulatory ecosystem which includes auditors, large firms, partnerships, consultants, as well as accountants.  There are multiple stakeholders which must work together to restore trust.

We emphasise that reforms should be proportionate given that the vast majority of accountants adhere to the high professional and ethical standards which are demanded of them by the regulators, the public they serve and also their peers.  It is worth repeating that the egregious actions of some, or the culture of certain organisations, are a far cry from the small accounting firms and sole practitioners serving small businesses and mum and dad clients on a daily basis.

From the IPA’s perspective, as one of the professional accounting bodies, we have well developed systems and processes, with reporting requirements to the Financial Reporting Council, the Professional Standards Councils, and the Tax Practitioners Board, as well as to the International Federation of Accountants. 

The IPA has promoted its five-point plan to members which aligns with the recommendations of the Committee, and which are essential to a proportionate regulatory framework.  

Transparency

Independence

Public Interest

Governance

Inclusiveness

We note that these recommendations are set against the reforms to the Tax Agent Services Act, and these will also contributing to restoring trust. 

IPA remains optimistic that bold and broad reforms will eventually restore the trust that has been lost.